HomeMy WebLinkAboutCC 1986-05-29 MinutesNow
CITY OF MIAMI,
COMMISSION
MINUTES
OF MEETING HELD ON MAY 29, 1986
(SPECIAL)
PREPARED sY THE OFFICE OF THE CITY CLERK
CITY HALL
MATTY HIRAI
City Clerk
0
MINUTES OF SPECIAL MEETING OF THE
CITY COMMISSION OF MIAMI, FLORIDA
On the 29th day of May, 1986, the City Commission of Miami, Florida, met
at its regular meeting place in the City Hall, 3500 Pan American Drive, Miami,
Florida in special session to consider a matter of public import namely, the
proposed City of Miami Sports Arena.
The meeting was called to order at 2:14 P.M. by Mayor Xavier Suarez with
the following members of the Commission found to be present:
Commissioner Joe Carollo
Commissioner J. L. Plummer, Jr.
Commissioner Rosario Kennedy
Mayor Xavier L. Suarez
ABSENT: Vice -Mayor Miller J. Dawkins
ALSO PRESENT:
Cesar Odio, City Manager
Lucia Allen Dougherty, City Attorney
Matty Hirai, City Clerk
Walter Foeman, Assistant City Clerk
An invocation was delivered by Mayor Suarez who then led those present
in a pledge of allegiance to the flag.
1. A. EXECUTE PRELIMINARY DEVELOPMENT AGREEMENT (FLORIDA DEPARTMENT OF
COMMUNITY AFFAIRVDECOMA VENTURE/CITY OF MIAMI) EXEMPTING SPORTS ARENA
PROJECT FROM DEVELOPMENT ORDER REQUIREMENT. B. EXECUTE LAND USE
AGREEMENT WITH MIAMI SPORTS & EXHIBITION AUTHORITY.
Mayor Suarez: Giving Commissioner Dawkins a couple of minutes to see if he
wants to be with us at the beginning of the presentation. Who are we going
to hear from first, Mr. City Manager?
Mrs. Kennedy: Mr. Mayor.
Mayor Suarez: Commissioner Kennedy, do you want to make a statement?
Mrs. Kennedy: Yes, before we start the presentation, let me just say for the
record that I will abstaining from this vote because of a conflict of
interest. My husband, as I stated before, was a consultant for the Decoma
group. I am therefore abstaining. I will be in my office.
Mr. Odio: Mr. Mayor, I think at this time it would be proper to have Mr. Dean
Patrinely to make a presentation on the project itself, and then, after that,
that we get into the terms of the agreement, and the agreement itself, if you
would.
Mr. Plummer: Mr. Mayor.
Mayor Suarez: Commissioner Plummer.
NOTE FOR THE RECORD: VICE -MAYOR DAWKINS ENTERED THE MEETING AT 2:15 P.M.
Mr. Plummer: Prior to starting, we are here today about the business of
possibly approving a contract, and I will ask you, as Mayor of this City, have
you seen the contract?
Id 1 May 29, 1986
Mayor Suarez: I have not seen any...
Mr. Plummer: Neither have I, Mr. Mayor.
Mayor Suarez: ...finalized form of an agreement.
Mr. Plummer: Neither have I. Now, with that being in lieu of why we are
meeting, why are we staying any longer?
Mr. Odio: No, that is not the reason...
Mr. Plummer: Excuse mel I'm speaking to the Mayor.
Mayor Suarez: Well...
Mr. Plummer: Now, I know you think you are Mayor, but not yet! That is next
November.
Mr. Odio: No, I don't want to be Mayor. They don't make enough money.
Mr. Plummer: Now, Mr. Mayor, I am not about here today, to in any way, shape
or form, invoke a rule, and I understand, legally, I can't do that, but I
think good sense tells us that if we are here about the business of possibly
approving even in concept, a contract, whatever, we don't have it, and I would
assume that Commissioner Carollo, Dawkins, neither, has it, because the last
time I checked, it was still in the typewriter. Now, how can we speak to any
kind of an agreement, any kind of a situation, when we don't have it?
Unfortunately, I like to do my homework, and there was no homework to do when
you don't have an agreement, so, I am in no hurry! I'll be glad to stick
around and listen to the conversation, but I have to seriously question as to
what we are doing, or what we are about, and Mr. Mayor, I want to state for
the record, I am not finding fault with the Administration. If anything, I
have to find fault with myself. It is my understanding that they went until
very late hours last night in this negotiation, and quite possibly, the
problem is we did not give them adequate time to negotiate and bring before
this Commission a final document, so all I am saying to you, once again, on
the record, I don't have a document, and I don't think anybody else does, and
I will leave it at that.
Mr. Carollo: Mr. Manager, you notice I said Manager, not Mr. Mayor.
Mr. Plummer: They both start with "M", and so does murderl
Mr. Carollo: No, there is a big difference, and this Manager knows that,
right, Mr. Mayor?
Mr. Odio: I hope so.
Mayor Suarez: So far, so good.
Mr. Plummer: Wait a minute, Joe, let me shake the tree and see who falls out!
Mr. Odio: If I might clarify, Commissioner Plummer, I don't know how to say
this, but that is not why we are here today. We were not told to bring a
finalized agreement today. You said you wanted to see the concept of the
project itself. You wanted to see the drawings, you wanted to see what we
were talking about, and we do not... the City of Miami does not get a final
say on this agreement. It is the Sports Authority, we do not sign it;
however, let me tell you...
Mr. Plummer: No, sir, you are wrong. You stand corrected, but go ahead, and
I will correct you at the end.
Mr. Odio: We said at the last meeting that...
Mayor Suarez; I would like a clarification of that particular legal question
at some point, but go ahead.
Mr. Odio: We were asking at the last Commission meeting that you approve the
predevelopment process that we were going through, and they will not get a
building permit if you did not agree with the business agreement we were
negotiating, and at the time, we were told, "Well, let's meet a week from now
Id 2 May 29, 1986
and go through the whole concept of this arena," and we were never told to
bring back a finalized agreement; however, we do have the terms of the
agreement finalized. It is now being put into legal language, but the terms
are very clearly spelled out in this memorandum that we have.
Mayor Suarez: I note that the wording of the resolution that I have here in
front of me, which I presume was just put together, because I have not seen it
up to now, as Commissioner Plummer has stated...
Mr. Plummer: I don't even have one.
Mayor Suarez: It says as follows...
Mr. Plummer: Excuse me, may we all be provided...
Mayor Suarez: Could you please get us all copies of it?
Mr. Plummer: Let me just read this one very brief sentence here. It says,
"Section 1., the City Manager is hereby authorized to execute a
preliminary development agreement, substantially in the form
attached..."
That is the key, "substantially in the form attached." There is
some delegation that we will be giving to the City Manager, to yourself, if we
approved this resolution, but there is some implication that the details are
yet to be worked out, because it says "substantially," and then it says,
"...subject to the approval of the City Attorney, between the Florida
Department of Community Affairs, Decoma Venture, the Miami Sports and
Exhibition Authority, and the City of Miami, which agreement provides
that the Miami Arena may proceed to development without a developmental
order, for a Development of Regional Impact, etc."
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So, we are delegating... yes? _
Mr. Odio: Excuse me, sir. This was in your packet in the last City
Commission meeting, and this is a resolution where we asking you to pass that.
Mayor Suarez: I... Commissioner Plummer.
Mr. Plummer:
Mr. Carollo: In other words, the bottom of what you are saying, Mr. Manager,
is that you are only asking us to pass the same resolution that was asked of
us to pass the last time we met at this issue.
Mr. Odio: Yes, sir, but at the same time, since the question came up of the
concept of what the project looks like, what are we doing, I think that you
should hear, since you have the time...
Mayor Suarez: Absolutely!
Mr. Odio: ... that Decoma people will explain to you what the arena will look
like, what...
Mayor Suarez: We all agree on that. I mean, Commissioner Plummer himself
says he has time. He wants to listen to the whole presentation.
Mr. Odio: And at the same I would like to present to you, and you do not have
to... you can act anyway you want, is the agreement that we have negotiated,
subject to us bringing the final legal language to you.
Mayor Suarez:
My own feeling, just so you know, is like a
lot of other things
that we hive
done here, they are subject to formalizing,
they are subject to
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working out details. In this particular case, and I hope
we all keep this in
-
mind, there
are so many entities dealing with this issue, that if we are
-_® satisfied as
to the substance of the basic terms of the
agreement, we should
move forward
with it, if we are satisfied. We have... I
have plenty of time
- today. I understand
Commissioner Plummer has stated he
has plenty of time,
—_ and Commissioners Carollo and Dawkins, I am sure want
to hear a complete
= explanation.
There has been some thinking in the past,
some expressions in
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— Id
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May 29, 1986
N.
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the media to the effect that the Commissioners have not been properly advised
of some of the things that have been done by the Sports Authority, and I am
sure we can resolve all of that today, so I hope we can move forward according
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to that, unless the Commission has a different way of look at all of this,
that is my own feeling.
Mr. Carollo: I just feel that no matter what difference there has been in the
past with the Sports Authority, we should not let those differences get in
the way of making one of the most important decisions that we will ever make,
not only for downtown Miami, but for the whole City itself.
Mr. Plummer: I concur with the remarks of my colleague, Mr. Mayor. If, in
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fact, all we are doing here about today is discussion, that is fine. We have
seen in the paper, for example, that the cost of the construction is
S27,000,000. I fail to see how that came about, because of the fact, I have,
for the past 30 days, asked for a set of plans, and I have to assume that
there are no plans, because they have not been furnished. Now, let me go back
to another point that you made, so that there is no misunderstanding. The
one thing in this document, or with the document which we will have that
pertains to the City, the legal entity, the City of Miami, is very fair, and
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that is, the fairness is, they will pay us $300,000 a year for the acquisition
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of property, which we laid out the money, and for $3,000,000 and 10 percent
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return on our money, I think is adequate. I do have a problem in the area of
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the 99 year lease with the Sports Authority, when the lease with Decoma, at
best, if the options are exercised, are 52 years, I've got a problem with
that. It is 32 plus 10 plus 10, that is 52 in most people's mathematics.
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Mayor Suarez: The lease with the Sports Authority had been approved for some
time, I presume.
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Mr. Plummer: No, sir, there is no lease between the City and the Sports
Authority. Now, we can't. They have that immunity set up by the State
Legislature. Now, let's understand exactly where we are. A lot people, I
don't think, understand. Mr. Mayor, this matter would not even be before this
Commission, if it hadn't been for a renegade called Plummer back in December,
who was about ready to go to testify and stop the bond sale in New York,
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because I felt it was a bad deal. At that time, is when of the Chairman, with
the approval of the board, gave this Commission the right of final say. They
didn't have to. They did not have to, legally, under the State statute. They
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have full authority to complete circumvent any discussion with this
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Commission, except in two areas, one, their budget, and two, the members of
their board. So, legally, there is nothing mandated legally by the State
statutes which created them, that says they even have to be here today. Let's
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understand that. Only by virtue of a letter surrendered to me by Larry
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Turner, the chairman, and the approval of his board, did they agree that they
would bring that here for final approval, so I want to make it very clear that
I do understand the legality of the whole situation, and it is a very
,;
technical point, but it is a technical point. I think that there are many
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areas that we have to get into. I hope we will, today. I then, still, after
that, seriously question - seriously question, as to what we can approve today
and what we can't. One area that I have to get into - it is the only time in
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my life I have ever seen a contract in which a company bidding was given a
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million, six dollars for the purpose of trying to become the successful
bidder. I have never heard of such 8 thingl And then on top of that, collect
a $1,400,000 development fee, which is what they got the $1,600,000 for. I
have never heard of such a thing, and I am sure there are answers, but I
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haven't got them yet. I don't know how you come about construction costs of
S27,000,000 without a set of plans. I don't know how in the hell you can even
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determine a construction cost without a set of plans. I can't do it, and the
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architects I've spoken to can't either. My other area, my vital area of
concern, is the same area that Commissioner Carollo has expressed about
_--
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Bayside, and that is, on the downside, what is net, and what is gross. How do
you figure their return? Is it on gross, or on net? It is the recommendation
of the Administration on net. I've got a problem with that, and I want to be
very honest with you. I am concerned that this does not become a continuing
__-
long range subsidy that we are into in other facilities. That is my area of
-_--
concern, and I on the downside, if you have read the documents it is a five
--
step procedure, as far as the subsidy and who pays what, and I don't think
that is anywhere near fair and equitable at this time, but that is why you
--
have negotiations, so I am just putting that on the record.
Id 4 May 29, 1986
Mr. Dawkins: If wo kill this project, does that kill the Sports Authority?
If it does, you got my vote.
Mr. Plummer: No, sir.
Mr. Dawkins: OK, so then, I've got to say this, then.
Mr. Plummer: Careful of your wording. I might be in a conflict of interest.
Mr. Dawkins: Well, if killing this project kills the Sports Authority, you
have got my vote to kill it. All right? I mean, I will go on record.
Mr. Carollo: Gentlemen, I would advise you to be more careful of your
selection of your words. We don't want anybody getting the wrong idea and
thinking there is a new duel in town.
Mr. Plummer: No, Joe, this is not on an island.
Mr.. Dawkins: I have two concerns. One is the design, I'm dissatisfied,
because it looks like a concrete hat box turned upside down, and I am
concerned about the parking, which I told Decoma about, but in the event that
they can assure me that they can do something about making that look less like
a hat box, and do something with the parking, I am prepared to vote for it and
let's get on with it and get out of here.
Mayor Suarez: I agree with that last statement. The one point that
Commissioner Plummer made that I don't necessarily disagree with, but I think
it kind of argues the opposite of the way you used it, Commissioner Plummer,
is you said that they have voluntarily consulted us, in which case, the only
action we cannot take, really, is to disapprove, but we can certainly approve,
at least in principle, in terms of the legal implications of what we do, and
we can certainly give momentum to this whole effort and God knows, it needs
momentum, I think, from the perspective of this community as a whole, and the
details of this, we have plenty of time to explore. I've got a lot of
concerns about the downside, just like you said, and to me the downside is not
the profits we are going to make. To me, the downside is possible losses from
it, and there. I want to be very clear on what happens once we go beyond the
reserve, and what the reserve is, because I have not seen what the reserve
amount is.
Mr. Odio: $3,000,000.
Mr. Plummer: That is on the document, $3,000,000.
Mayor Suarez: And what the projections are, after what chances there are that
we might go beyond that reserve and all of that, and there is a lot of
technical questions that I think we are going to have to...
Mr. Odio: We can answer all those questions for you, if you wish.
Mayor Suarez: Right, so why don't we proceed, as you suggested, to have Mr.
Patrinely give us an explanation.
Mr. Odio: On the agreement that we have worked out, by the way, you do retain
the right to look at the project, to refuse anything you don't like about the
design, we retain that right.
Mayor Suarez: Also to analyze the budget on a yearly basis, too.
Mr. Odio: The Miami Sports Authority will approve the yearly budget of the
operations of that facility.
Mayor Suarez: The concerns a lot of us have expressed in the past over City
joint ventures with private sector, particularly those involving public lands,
but any projects, is on getting a return to the City based on net income, as
opposed to gross income, because net income can be fudged or adjusted by
anyone, and I frankly prefer gross income, most of the time. It may be that
in this case, because of the percentages involved, and because of the control
that we exercise over what is net income, and over what the expenses are, that
I won't have any problem. I rather suspect I won't, but all these details, I
believe all of the Commissioners are ready to discuss, and I think, very
knowledgeable on it. God knows we voted on some other things without being
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as knowledgeable as we are on this, and again, I just wish that all along, the
Sports Authority had kept every Commissioner apprised as much as possible. I
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also know that my initial concern of the $7,100,000 being in cash is going to
still be on the table and has got to be answered today. I have not seen the
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famous letter of credit, and I would like to see its terms, but I believe,
Dean, if we proceed, as Commissioner Dawkins has suggested, to hear your
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presentation, maybe we can make it look a little bit less like a hat box, or
whatever.
Mr. Carollo: While Dean is coming up, I would like to make one brief
statement. I think that what we have here again is another classic battle
between special interests that want to make another part of Dade County the
center of business of Dade County, be that West Dade or North Dade, instead of
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seeing the heart of Dade County, the heart of the City of Miami, downtown
Miami, being the business center of business for all of Dade County. The main
argument that I am hearing from those that oppose this project, is that there
is not enough parking. Well, I don't foresee any of the activities that we
are going to be having there, definitely none of the major ones, to be held
during the business hours Monday through Friday, at any given day of the week.
All the major activities there, are going to be held at night, or on weekend
days, which means that we are going to have thousands of parking spaces
available in downtown Miami for any activity that is held there at night or on
weekends. Beyond that, we now have the capability in place of Metrorail, of
the people mover and I-95 just off the way, so I think that the argument that
those are giving, that this is going to fail because there is not enough
_
parking, that we don't have site parking, is a very poor argument, and it is
just an excuse to try to derail this whole project, so that we go ahead and
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stall, and stall, and stall, until we finally kill the whole project, and I
think that one of the worse things that could happen to the City of Miami, is
Miami. We losing
if we don't build this arena inside the City of are already
-
our football team. Are we also going to give away the possibility of a new
basketball franchise coming to somewhere else, if it is not the City of Miami?
I don't think the City of Miami can afford that.
Mayor Suarez: I certainly agree with that. Dean?
Mr. Dean Patrinely: Dean Patrinely, Managing Partner, Decoma Venture. I
have taken note of all the comments today and look forward to the rest of the
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afternoon - I think we will have time available to going over those points
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with you. What I would like to do, before we get into the details of the
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design and the programming, is give you an update of where we are on our
various activities, since selection back in March, 1985, sixteen months ago.
We are in essence, two months away, subject to your approval, away from
ground breaking, on what we believe to be a monumental project for downtown
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Miami, and within the last sixteen months, we have been working on, with the
State, City government, and the authority, the County Departments, the D.R.I.
and the predevelopment agreement, which is the first document you all
discussed regarding letting us go with the impact of environmental concerns;
land acquisitions bond financing, the arena design, and as a matter of fact,
for bids;
the excavation package will be ready on July 1st, ready minority
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programs, parking in transit and Metrorail access, franchise and attraction
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discussions, as fiduciary on behalf of this City. We have worked out
tentative agreement with the County with regards to the chilled water use.
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You currently have a cogeneration plant in the area that is a lot of chilled
water, that we are trying to use for the arena, given the fact that Mr.
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Carollo pointed out this is an off peak use, and it is an opportunity for the
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area to enhance a mutual sharing. And we have been working on the Exhibition
Center with Commissioner Plummer's committee. Most of those tasks, I would
mention to you, are what we have been doing with the authority and the City
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itself with the predevelopment agreement funds with the authority. In fact,
80Z of that is third parties and D.R.I. and the bond financing. Our land
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acquisition, working in conjunction with the City, is almost 100 percent
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complete. We should have the final approval of the D.R.I. in the fall. Roger
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Carlton today, in association with others, will present an updated parking
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plan that I think will be of interest. Our design is 75 percent complete as
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far as design development drawings and we are here today to... Peter Doyle, my
partner, with Linbeck will explain what the thing looks like, how it works,
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and why it is unique. We are under negotiation now, with N.B.A. franchise
-_
negotiations with Zev Bufman and Billy Cunningham, and we have received, as
you have in your packets which was delivered, I believe, a day or two ago,
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event commitments, not contracts, but commitments to the interest :'n this
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arena for the following: ice follies, wrestling, largest concert promoter in
id 6 May 29, 1986
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South Florida, equestrian shows, rodeo, tennis, Harlem Globe Trotters, circus
and Sesame Street.
Mayor Suarez: When you say you are negotiating, or have been negotiating with
Bufman and Cunningham, that does not indicate that you are not negotiating
with anyone else that might get an N.B.A. franchise, is that correct?
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Mr. Patrinely: As your fiduciary, and your partner in this, we have an
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obligation to bring the City of Miami the best team and combination package we
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can. Our door is always open, and we look forward to negotiating one at a
time with any interested party as we have said from the outset. Our interest
is your interest, and we have an obligation to you to bring to you the best
deal.
Mayor Suarez: Have you not been contacted by the Potamkin and Werner group,
in connection with possible franchise that they might obtain?
Mr. Patrinely: Yes, we were contacted, and our discussions continued to a
point, and we had to... I believe, that there is some concerns on their part
that we indicated we would like to continue on behalf of the City to talk to
others, and we will continue to do that with other parties.
Mr. Plummer: What of your $275,000 for operational fee is dedicated to that
endeavor?
Mr. Patrinely: $275,000... I would like to defer, if I may, if it is all
right, on the business points, and let me get to the design, and we will get
into that.
Mr. Plummer: Well, it was only based on the question of the Mayor, of your
involvement at the present time in negotiation with Zev Bufman, that, that fee
which will be paid to Zev Bufman comes from the $275,000 operating expense. I
am asking what portion of that $275,000 is dedicated to that, whether it is
Zev Bufman, or someone else.
Mr. Patrinely: I am still not following the question. No, the promotional
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expenses in the... and I am not a... my partner is here - Mike McGee that runs
01.
the arena and his part of the Dome in Houston. The expenses we have
performed, which you see in the package, are net of those kinds of expenses.
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Promotional activities, event costs are netted out of tickets sales, so what
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you see in the package are in essence, and I am using terms of art in the
industry, a revenue which the City will see, at the bottom line. $275,000 is
the management fee paid to the Decoma Venture, which in turn is paid to the
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arena operation entity, which we are retaining on our mutual behalf, to run
the arena in a first class manner like the Forum in Los Angeles, the
Meadowlands in New Jersey, the first quality
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Mayor Suarez: And that entity has not been determined yet?
Mr. Patrinely: We are the entity.
Mr. Odio: But, you ... no.
Mr. Plummer: Yes, they are the entity.
Mayor Suarez: As far as who will do the promotion, and the sale of tickets,
and all of that? I mean, you haven't determined that $75,000, will in fact be
paid to...
Mr. Plummer: Gilchrist, you told me that...
Mr. Odio: No, no, Bufman told me that.
Mr. Plummer: Well, OK, you see, this
is where I've got a problem. Now, I
was told last evening, that from those
monies of $275,000, the operating fee,
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which by the way has an escalator clause on an annual basis, that an entity
such as Bufman, or whoever else they
negotiated with, would be paid out of
that $275,000. Now, Mr. Patrinely is
standing here telling me that is notOE-
correct. Now, all I am saying is, who
is correct?
Mr. Patrinely: Let me make a general
statement. We are very excited aboutXF
having possibility of having Bufman and
Cunningham organization work out a
deal.
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7 May 29, 1986
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Mr. Plummer: Or any other entity.
Mr. Patrinely: Any other entity.
Mr. Plummer: I am not locking them in.
Mr. Patrinely: And the deals in these types of situations, I liken to, for
,.:
lack of a better term, a space shuttle. They are very complicated with
minute little parts. There is an N.B.A. lease, there is assistance, in the
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case of certain particular ownership where they can actually help out in the
marketing of certain aspects. There is equity. Each of those groups are
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somehow interrelated, depending on how the deal is structured. I think it
would be inappropriate for me to discuss in detail those negotiations at this
point.
Mr. Plummer: I can appreciate that. What I can't appreciate is your comment
that says nothing to them from that $275,000, and Mr. Gilchrist's statement
saying that it was. Now, I am not asking you to lay on the table. I did
originally, the numbers. Now, you don't want to answer it that way, then I've
got a problem with the thing that says that you don't have anything in that
$275,000 for whoever you negotiate with, and Gilchrist tells me they do. That
is where I've got a problem.
Mr. Patrinely: The entity that will operate the arena, per our R.F.P. and
your selection and approval, will be an affiliate of Decoma Venture, H.S.A.
Management, Inc., who runs the Astro Dome, the Summit Arena. We have
operations in the Meadowlands with John McMullen, who owns the Houston Astros
and Jersey Devils Hockey Team. That entity will run and operate the arena,
per our plans.
Mr. Plummer: We understand that.
Mr. Patrinely: Beyond that point, if for example, a particular N.B.A. owner
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brings a variety of talent to the table that are valuable both to the City and
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to the Decoma, then we will work out a program that makes sense for all
parties.
Mr. Plummer: Out of what fund?
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Mr. Patrinely: The fund depends on.... It is hard for me to say this pot of
money will pay for that event if that pot of money goes to four different pots
to get to that. That is the problem I am having. I know you want me to say
,,.
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what piece of the $275,000...
Mr. Plummer: Dean, that is your problem, all right?
Mr. Patrinely: Well, actually, we are a...
Mr. Plummer: My problem is, where is the money coming from? We know for
example...
Mr. Patrinely: Revenues from the arena, from ticket sales.
Mr. Plummer: But, not from your operating.
Mr. Patrinely: It may. We are not ruling that out. You are asking...
Mayor Suarez: You put your management fee into your regular operating fund,
and it may come from there. That is...
Mr. Plummer: But you see, that is where I am trying to pin him down on the
record, OK?... and it is being evasive. That is why I can't settle. I
can't... we know for example, where the rent is coming from, excuse me - the -_
money to pay for the City's acquisition of land. We know where that is coming
from. We know where the money is coming from to pay off the debt service on
the bonds, OK? We know where that is coming from. Now, what I am saying is,
we don't show anything in the documents about promotion, or an N.B.A. _
franchise, or any of that, and I am asking, where is that money coming from?
As we all have been sitting here, and continue, that one of the keys to the ==
success of this arena, is in fact, an N.B.A. franchise. That is 80 nights of
play a year, or more or less.
1d 8 May 29, 1986
0 W,
Mayor Suarez: Let's proceed with the assumption that when you get to the
business aspects of it, we will clarify more the points. Is that all right?
Mr. Plummer: Fine, as long as it is answered before we leave.
Mayor Suarez: I also want the $7,100,000 in cash answered before we leave,
but...
Mr. Patrinely: I will answer that right now. We have committed to the City
and to the Authority that upon document execution, and probably before that,
we are going to present to you, our letter of credit on a New York bank,
$7,100,000; that before we go further, you will know, and you will see that in
fact this money is available. It is a letter of credit agreement, it will be
at risk from day one when you put your funds up too.
Mayor Suarez: How will it be at risk? Will we actually draw from it as the
construction begins?
Mr. Patrinely: Yes.
Mayor Suarez: That is the kind of risk we are talking about, here, I think.
Mr. Patrinely: Yes, as it goes into a pot, it goes into a...
Mayor Suarez: Well, you can only draw from a letter of credit if the terms
are such that you can. Do the terms reflect that?
Mr. Patrinely: A letter of credit will be turned into cash.
Mr. Odio: The agreement says, at least the one that I negotiated, with him
that the money will be used for construction, so it will be totally at risk.
Mayor Suarez: What level of construction, the beginning, or...? You had
mentioned at one point to me, Cesar, a equal draw from the $7,100,000, and
from the rest of the bond monies.
Mr. Odio: Prorated, yes.
Mayor Suarez: OK, that is not equal.
Mr. Plummer: Well, it is our prorated as ours is prorated.
Mr. Odio: As ours, but we will have the...
Mayor Suarez: Prorated on the basis of the total projection of cost of
construction.
Mr. Odio: But, the total money will be used - the $7,100,000 will be used.
Mr. Plummer: Well, let's get into the other aspect now. Let's get into the
aspect of $2,000,000 of that money comes from the concessionaire. Let's get
into it.
Mr. Odio: But, we... I prefer...
Mr. Plummer: Mr. Gilchrist, you had better stand up here, because what you
and the two gentlemen came to my house and spoke about last evening, I am
getting words that you guys were tired, and I didn't here what you said, so...
Mr. Odio: Commissioner, may I say something? Can we explain the whole
business agreement at one time?
Mr. Plummer: Yes, let's do. That is what we are here for.
Mr. Gilchrist: I wasn't tired until you talked to me for two hours.
Mr. Plummer; That is fine. Next time I will do three!
Mayor Suarez: This is like an appellate argument.
your presentation before the questions beginl
You never get to finish
ld 9 May 29, 1986
�r
Mr. Plummer: Mr. Mayor, if you and I want to keep our mouths shuts and let
him finish, that is finel I will do that, but you asked a question.
�-
Mayor Suarez: You promise?
i
Mr. Plummer: Yes, sir. Do you promise?
Mayor Suarez: You got it.
Mr. Plummer: Go.
Mr. Petrinely: I am going to turn the meeting over to Peter Doyle, president
of Linbeck Construction Company. The company will be building the project,
and my partner Decoma Venture, to describe what you are going to have built
here.
Mr. Peter Doyle: Good afternoon, I am Peter Doyle, a partner in the Decoma
Venture, president of Linbeck. What I would like to do is just briefly bring
you up to date on where we are with the design of the project. The site, as
everyone knows, is located N.W. 1st, N.W. 8th, and North Miami. It had been
selected, looking at the benefits of its relationship to Metro -Dade, to the
transit system, to the people mover, walking distance to the people mover
system, and also, its direct relationship to the Bayside development, which we
think is a very compatible activity to the activities that are planned for the
arena. They will, in fact, complement one another and make each one a better
success.
Mayor Suarez: Would you say it is walking distance from Bayside?
Mr. Doyle: I would say it is walking distance. In the evenings, when
performances and programs are put together, we will have to have the proper
security along that 6th Street. The other point relative to the site
selection was we felt that it was a new activity node that would extend the
activity of downtown at some point in the future. It would at least give a
A
magnet that would draw future development from the downtown area to this
point, and expand the activity within the City. The design of the facility,
for the uses, is not simply basketball. Many people come to think of this
arena being for basketball. It has been designed for tennis, indoor soccer,
tractor pulls, gymnastics, spot shows, any number of activities that will take
place in this activity in your City that can now not take place and seat
y
16,000,000 plus individuals in comfort. The design also, of the arena, has
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been developed from the inside out. We looked at the user, the individual
sitting in that seat first, to see that he had the proper vision down to the
arena floor, as well as sit in comfort, total comfort, during a performance.
That is how we generated the design we have. From that point, we created the
most efficient structure, and enclosure that would benefit the project,
thinking about how it relates to the City, and how it relates to the
surrounding area. What we did is come up with a curvilinear design, getting
away from a rectangular box, to allow for softened corners as you look at this
building across the skyline, and we think that is an architectural benefit.
'
As you move down from the drum of the circular area, which is also designed to
lower the height and minimize the height, yet still keep the maximum height
from the floor to top of structure, we go to concourse level. At the
concourse level, what we have attempted to do with the glass block - it is
surrounded by a glass block in the entire concourse area, where the pedestrian
comes up the walk and enters the facility. The idea here is, which is quite
,2f
different from most arenas, was to not have just simply an enclosed box with
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no outside light being brought into the public areas, but to have glass block
bringing daylight in during the daytime period, but also at night, to create
activity and excitement around the concourse, to allow you, as you come up to
the facility, walking up to it, you will see the activity behind the glass
`
block and it will attract you into the facility, and we think that is a nice
detail added to the total design. As you come down off the concourse, our
subconcourse area, which is below the walk, the pedestrian area, which is
-
about 20 feet above grade, that is a service area. That service area is
designed for maximum efficiency of getting teams, facilities - to back up it
is necessary to have the activities function most efficiently within, and it
is designed by the users of the space and the operators, so we know it is
efficient. As important as the building itself, we believe, is the plaza
-
area. We have taken the minimum site that we could, could afford within the
package that we have presented to the City here, and yet, stepped the building
=_
back, to allow for a park like plaza area that is heavily landscaped on N.W.
Id 10
May 29, 1986
8th, on 1st, and Miami, and we are going to spend a lot of money on
landscaping there, and we think it will be quite pleasant and quite different
.�
than what you will find in arenas in most urban areas. The base of the
building is masonry, so the materials that we are using, beginning at the top,
is a prefabricated, insulated metal panel. Then, we go down to the section of
the concourse which is masonry and glass block, and then the base being the
glass block, with the plaza being concrete and pavers. The last item, or one
of the last items I would like to bring you up to date on is the status of the
'
drawings. We are at this point, 75 percent complete with the design
development, still subject to hearing input from you, and finalizing our
design, we are approximately 25 percent complete with working drawings and
�:..,
construction documents, shooting for an early release of bid documents for
the excavation and the foundation on July 1, again focused on the August 4th
construction start date. That is the only way that we will be able to
deliver, under very tight schedule considerations, a facility in November of
1987. We feel comfortable with where we are. We are excited about our plan.
It is a state of the art facility that has many uses. I.believe it will be a
public facility that will have more use than any other public facility you
have in the City here, and will generate a lot of excitement in the community.
We are ready to move forward, we are ready to begin August 4th, and we are
here to answer your questions.
Mr. Dawkins: The City made two parcels of land available. One, was from 8th
Street to 7th Street, and one was from 6th Street to 7th Street. Did the
Sports Authority, or whoever we made those parcels available to, did they
purchase both parcels of land?
(INAUDIBLE BACKGROUND COMMENTS)
Mr. Doyle: Excuse me, we'll get a direct answer now.
Mr. Robert Sechen: Vice -Mayor Dawkins, the block 44 was purchased by the
City of Miami utilizing a $1,000,000 payment that was made by the Sports
Authority, in addition to other funds provided by the S.E. Overtown/Park West
project office. The southern block, block 57, is being purchased solely with
funds provided by the Miami Sports Exhibition Authority.
Mr. Dawkins: Is, or was?
Mr. Sechen: Is.
Mr. Dawkins: So, it hasn't been purchased.
Mr. Sechen: No. The funds have already been deposited into the court and
title has passed to the City as a result of the deposit of funds made b the
Miami Sports and Exhibition Authority. P y
Mr. Dawkins: So, the Sports Authority owns 44 and 57?
Mr. Sechen: Technically, the ownership is held by the City of Miami. It is
nr
Y` Y . Y y provided by the Sports Authority. It
technically with but the utilize money is a technical issue relative to, it is like a nominee trustee. It is being
? held in a trustee relationship for the Authority, but it is the intent upon
the signing of the land use agreement, that the land will all be owned in fee
simple by the City of Miami.
a Mr. Plummer: Does that include the parcel that Decoma is buying and is making
Ian;; a part of?
Mr. Sechen: Yes, sir, it does.
Mr. Dawkins: So, what you are saying then is that you are thinking of
putting the arena on 44th, is that correct?
Mr. Sechen: And part of 57.
Mr. Dawkins: So then, you are going to use approximately one -fifth of 57.
Now, we are talking about choice Miami land, where you said that this is where
we wte.re going to provide the utopia in the area, and now I have got a
substandard plot of land. What would you do with it? ... since all of the
others are standard, and we are talking about building homes and businesses,
now we have got a substandard lot. What are you going to do with it?
ld 11 May 29, 1986
A 6i
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Mr. Sechen:
The southern part of that, is what you are talking about is the
'
triangle down
below?
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Mr. Dawkins:
Yes.
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Mr. Sechen:
OK, that is...
Mr. Dawkins:
Where you didn't buy the railroad site, yes.
I
i
Mr. Sechen:
Yes, that land is in private ownership and is not owned by the
City, or the
Authority. I
l
Mr. Dawkins:
All right. Hold it now, wait now. Let's back up now. First you
said City has
either access to, or owns 57 and 44. Now you tell me...
Mayor Suarez:
What is your point, Bob?
Mr. Dawkins:...
57...
Mayor Suarez:
Maybe you could point on the map what he is talking about on
those lots, Commissioner, so we could...
Mr. Dawkins:
But now he tells me that it is not. It is in private ownership.
Mayor Suarez:
Show us exactly on there, Bob, would you?
Mr. Sechen:
This is block 44.
Mayor Suarez:
Right.
Mr. Sechen: (OFF MICROPHONE, INAUDIBLE)
Mr. Dawkins: Right.
Mr. Sechen: This green area here is being purchased utilized solely by the
Sports and Exhibition Authority fund. The remaining parcels - the remaining
part of 57, which is this part here, and these parts here, remain in private
ownership.
Mr. Plummer: What about the streets?
Mr. Sechen: The street here would be vacated.
Mr. Plummer: By who?
Mr. Sechen: By the City Commission, should they so desire.
Mr. Plummer: Who is paying us for that?
Mr. Dawkins: The private owners.
Mr. Plummer: No, no. We own it, but here again, who is paying us for it.
Mr. Dawkins: No, let's talk about the private owners who own the private
land.
Mr. Plummer: I am not taking black olives for that!
Mr. Dawkins: No, sir. Neither one of us. I've got a problem, and I told you
guys this from the beginning. Now, you came in here and ask for two of the
choicest plots. I argued against it. We gave them to you. Now, you have
taken one and subdivided the second one and you didn't even go about obtaining
it. Now, what you are going to leave on the City of Miami is the hassle of
arguing, when we get ready to develop something, with the private owners, and
then some judge will do, just like the judge did the other day where a guy
bought a piece of land... not no guy, Tom Post, purchased a piece of land in
1982 for $15,000, and the courts said he held it for two years and it
appreciated to $150,000. So now, we are going to come back here and we are E-
going to go through the same hassle. Now, we made these two areas available,
and I think the Sports Authority needs to purchase these two parcels of land!
And the other gentlemen... the $27.000,000 that Commissioner Plummer
mentioned, is that the total cost, the low estimate, or the maximum estimate?
14 12 May 29, 1986
.>� K "i
Mr. Doyle: The maximum estimate.
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Mr. Dawkins: Beg pardon?
Mr. Doyle: That is the maximum estimate, and it was determined 16 months
'
ago..* actually, it was a higher number at the time. We evaluated something
mow:
like 15 to 20 arenas around the country, and looked at the cost per seat.
That is how a contractor, a builder and an architect once determines what a
budget should be for a facility. This facility will be built at the lower end
of that scale. The range of cost escalated, range from $6,O00 a seat, in the
New York area, which could be expected in that area, down to less than $2,000.
i
Mr. Dawkins: All right, now, the arena that you based your estimates on in
New York City was built in whet year?
Mr. Doyle: The Meadowlands were built... I am not sure, Paul.
Mr. Dawkins: What year?
Mr. Doyle: Opened in '80...
Mr. Patrinely: Six years ago.
Mr. Doyle: Six years ago.
Mr. Dawkins: That is six years ago. So, you really and truly are not
talking — you are talking about 1980 and today you are talking about 1986
dollars.
Mr. Doyle: No, no. They were adjusted at....
-:
Mr. Dawkins: Beg your pardon.
7
..,, ,,,, •
Mr. Doyle: Adjusted at today's costs.
Mayor Suarez: Tell us about that — the projection, and following up on
Commissioner Dawkins' questioning. How do we know about these projections
being a fair estimates. What happens if we just don't have enough money to
build it. Is that a possibility?
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Mr. Doyle: It is a possibility, but unlikely. We feel we have done a very
Y P Y Y Y
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good job in managing the design, as it has moved along, picking optimum
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systems, and looking at being your partner. We are the Authority's partner.
We are not out there generating this on our own, plus, we have had a committee
from the Authority, headed by Gene Marks, that has been reviewing our plans,
reviewing our costing reviewing what we have in our estimates. It is an open
~
book, and it is subject to review by the Commission, so...
Mr. Plummer: No, that is not true. You are almost right. Make the
distinction between the Commission, and the Authority, OK?
Mr. Doyle: The Authority. Excuse me, you are correct. Mr. Plummer.
Mr. Plummer: Excuse me, Mr. Mayor. Have you finished your presentation,
because I promised not to ask questions until.
Larry Turner: We have a parking question....?
Mr. Plummer: No, let's talk to the construction. Is that how you want to do
it? I will do it any way you want.
Larry Turner: We can, we can get Roger to do a presentation.
Mr. Plummer: We never believe Roger anyhow, so don't worry about that. That
is the car czar!
UNIDENTIFIED SPEAKER: That is the last part of the presentation.
= Mr. Plummer: Well, let me ask on the record. Sir, the construction company.
Larry Turner: OK.
Id 13 May 29, 1986
{•s':
Mr. Plummer: I have stated before, and I will state again for the
record,
which has no bearing on
you, that I am very, very, uncomfortable
that
this not
going through a bidding
procedure. I want to tell you
that. I guess
that is
my long training in the City, that you always go to
bid, and only
through
bidding do you find the
best price available, but that
is my hangup, OK?
Now,
am I to understand that
through the Fuller Company, at
all times...
Larry Turner: OK, Fuller is the consultant to the...
Mr. Plummer: They are to the Authority?
'!
Mr. Doyle: To the Authority.
Mr. Plummer: They are, at all times, in full control and have veto power over
anything that you may do, that you are limited to 4.7 percent profit, is that
correct?
Mr. Doyle: That is correct, to the point though, that we have in the
contract, with the Authority an incentive program that allows us to share in
savings, but allows also the Authority and the City as partners with the
Authority...
Mr. Plummer: The Manager is saying no.
Mr. Doyle:... to share in potential savings.
Mr. Plummer: The Manager here is saying no. Now, because, you know, on that
kind of a basis, an incentive program tells me you over priced it to begin
with.
Mr. Doyle: No, I mean, it is like pricing any particular project. There are
�.. +
risks inherent with construction.
=; Mr. Plummer: No, it is no risk, because you are going to put up a bond with a
max guarantee.
Mr. Doyle: Not risk to you. Not risk to you.
Mr. Plummer: OK. My point again is, are you stating for the record that you
are limiting your company to a 4.7 percent profit?
Mr. Doyle: No, I am not saying that.
Mr. Plummer: All right, Mr. Manager, you told me they were.
Mr. Doyle: Under this contract, it is an open book. At the end of the
contract, the Authority has a right to review the cost that have been expended
on the project. If, by chance, because of good management, good support, from
the City, from the Authority, we are able to proceed with minimum changes to
the work, and we are able to complete the facility ahead of time, because of
either good weather, good subs - subs that don't go out and you know go broke
on us as we are building it, savings will be returned.
Mr. Odio: Let me make it simple. If they save $2,000,000, we keep 75 percent.
It goes back to the Authority, and they get 25 percent of the savings for
construction.
Mr. Dawkins: It goes back to the Authority. What comes back to the City of
Miami?
Mr. Plummer: Nothing.
Mr. Dawkins: ....taxpayers.
Mr. Odio: Well, this is a deal between the Sports Authority and them. That
is it.
Mr. Plummer: All right, except for the incentive of a determined amount, if
it exists, you are telling me that you are limiting yourself to a 4.7 percent
profit.
Id 14 May 29, 1986
f
Mr. Doyle: Absolutely.
z
1
Mr. Plummer: Thank you, Sir.
Mr. Odio: Yes, Another thing, sir, if they overrun, that is their problem.
4T
Mr. Plummer: That is where the max bond comes in, and I understand that.
f
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Mayor Suarez: If they overrun up to the bond.
r
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Mr. Plummer: Anything over the bond, it is paid for either by them, or the
bond.
Mr. Doyle: Mr. Plummer, could I clarify one point.
Mr. Plummer: If you wish.
Mr. Doyle: That our fee for the guaranteeing the project and managing the
project, is 5 percent of direct cost. When you consider as a total 100
percent of contract, then it is 4.7 percent of that total, all right?
Mr. Plummer: Sir, I am not going to hold you for three/tenths of a percent.
Now, who is the development team?
Mr. Doyle: The development team? Dean Patrinely.
Mr. Plummer: And you are going to speak to that later?
Mr. Patrinely: The Decoma Venture is composed of individuals as developer,
builder and operator. The Decoma Venture in our business plans submission to
'
the Authority and in discussions with the City staff, suggest that as part of
the package, the value we can create, and assimilating from day one an arena
operator in the design process to make sure this is efficient means that a
developer, my company, a contractor, Peter Doyle's company, an arena
t
management company - HSA Management, will all be retained for professional
f
services on industry standard basis, as you would hire anybody. And for those
F
professional service fees, a developer, a contractor, and operator, we execute
those tasks that are described...
Mr. Plummer: And for that, you are going to receive $1,400,000.
Mr. Patrinely: For that, which is not profit. If $1,400,000...
Mr. Plummer: Why isn't it profit?
Mr. Patrinely: Let me give you an example.
Mr. Plummer: Well, also speak to the $1,200,000 that you have drawn down from
the Authority.
Mr. Patrinely: None of that is profit to the Decoma Venture, not one penny!
Mr. Plummer: Excuse me. Are you stating for the record that that has not
paid a lot of the expenses of the travel?
Mr. Patrinely: It has paid expenses of the travel that inured to the benefit
of the City. For example, the bond financing...
Mr. Plummer: Whoa, excuse me. We are speaking about at this time you are not
the selected entity.
Mr. Patrinely: For the development of the arena?
Mr. Plummer: For anything. You have no vested interest at this time, OK?
Mr. Patrinely: That is not my technical understanding of our selection...
Mr. Plummer: Well, I will read to you, then, from the document, which is
prepared...
Mr. Patrinely: I think that document relates to the D.R.I. predevelopment
agreement. That document by itself...
-- Id 15 May 29, 1986
f�
Mr. Plummer: OK, but as far as your standing is concerned, you are trying to
become the developer. It has not...there has never, and Mr. Turner is here,
there has never been a document signed with Decoma, making you the developer.
Is that correct?
Mr. Larry Turner: That is correct. They were selected as the developer with
w
whom we would attempt to negotiate a deal, which we are doing now and bringing
before the Commission.
R.
Mr. Plummer: OK, but they are not selected.
Mr. Turner: They are selected as the first one that we will attempt to
negotiate a deal with.
Mr. Plummer: Exactly, but they are not selected. OK.
Mr. Turner: That is correct.
Mr. Plummer: Now, as such, they are in a position today of trying to become
that developer to get a binding contract.
Mr. Turner: No, sir. Today we are not asking the Commission to approve a
binding contract.
Mr. Plummer: Not today. They are trying to become the developer of record
and binding contract.
Mr. Turner: That is correct.
Mr. Plummer: Whether it is today, or tomorrow, OK. Now, as such, you have
had a $1,200,000 of the Authority's money to help you guarantee and land that
position.
Mr. Turner: The Authority made a available to the developer first selected
for negotiations, those monies that we would have to spend, regardless of what
developer was selected, in order to initiate D.R.I. and financing initiatives
1 on the financing side, so that we can get the money in the bank before the end
of the year, and obviate the risk of running afoul of the tax laws. Whichever
developer may ultimately build this structure will take advantage of the
u
expenditure of those funds for the D.R.I. process and the bond financing.
Mr. Plummer: Do we have a breakdown of those costs?
Mr. Turner: Yes, sir, we do.
Mr. Plummer: Of the monies expended?
Mr. Turner: Yes, sir, we do.
Mr. Plummer: You will forward a copy to me?
Mr. Turner: Yes, sir.
Mr. Plummer: Thank you.
Mayor Suarez: Let me ask you about the structure itself, and I am not really
an expert by any means. I just have a couple of questions that came to mind
as you were describing it, or maybe it was Peter that was describing it. Is
it symmetrical?
Mr. Doyle: It is basically symmetrical other than the service area in the
back access to the back.
Mayor Suarez: Will the basketball court be symmetrical?
Mr. Doyle: The basketball court will be symmetrical.
Mayor Suarez: It is very important for outside shooters.
Mr. Doyle: Will be symmetrical.
ld 16 May 29. 1986
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Mr. Doyle: One item I didn't mention, related to the basketball and other
performances that we have, in the beginning first phase, 16 sky boxes, we were
x
able to expand that to 30 sky boxes.
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Mayor Suarez: Really, what I meant is the background, not the court itself.
M
I know that will be symmetrical, but I mean, will the background be
symmetrical, or are you going to have protrusions of some sort that will mess —
"<
up the view of someone that is using it for basketball?
Mr. Doyle: It will be symmetrical, and then we will have a center hung score
fia
board, so visibility to the score board and any future close circuit use, or
whatever would be available.
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Mayor Suarez: And the court itself, at least as you have it in that —
conceptual sketch there is placed right smack in the middle?
Mr. Plummer: Question. How many feet? I have read about three different
proposals, everywhere from 18,500, and it keeps reducing and reducing and
reducing. Where are we now?
Mr. Patrinely: An arena has varying seating capacities. The maximum seating
capacity, which in this place reflects concert seating. If Lucien Paverotti
wanted to come to sing in Miami, he would fill, basically, where the
basketball court is with chairs. The maximum seating capacity is 16,590. To
play basketball, you can't put chairs on the floor, and that reduces it to
about 15,343.
Mr. Doyle: 15,352.
Mr. Plummer: OK, it was originally scheduled, I think at 18,000, is that
correct?
Mr. Patrinely: A general number, yes.
E
Mr. Plummer: Have we not seen across the country that most of the 15,000,
seating capacity is now being torn down to build 18,000 and more?
(INAUDIBLE BACKGROUND COMMENTS)
Mr. Plummer: Like Philadelphia?
TU, >`_+
Mr. Patrinely: This is Mike McGee, president of Summit Arena in Houston, and
F g'`,y¢ psi',, ,fy ..
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now also our venture partner.
Mr. Plummer: What does the Summit seat?
Mr. Mike McGee: The Summit seats 17,048 for a concert.
Hr. Plummer: For basketball, or total concerts?
Mr. McGee: For basketball games, 16,016, and that includes the seats in
the...
Mr. Plummer: Let me tell you my area of concern there. We have two other
facilities presently in South Florida. They are not in Dade County. They are
in Broward County, if you are familiar with the Sportatorium.
Mr. McGee: Yes, sir, I am, somewhat.
Mr. Plummer: As we are very much aware, these people who put on concerts
definitely get their return on the amount of seating available. We are now
going to be building a brand new facility that seats exactly what they have.
I think the Sportatorium is the one that seats the same amount at this
particular time. I am concerned that we are going in when others are going
from the position of where we are going in to expanding to a bigger facility.
What I guess I am saying is this — that if a man is standing in New York and
he is looking at using the facility in Miami for a concert at 16,590, and he
is looking at the Sportatorium at 18,000, and he has that additional 1,200, or
whatever it is, seating, would he not want to go there where he has the
potential of more revenue? I lived through the Superbowl presentations and
one Superbowl presentation I could never fight is Los Angeles, with 102,000.
I couldn't offer that, and the N.F.L. always used to want to look favorably on
Id 17 May 29, 1986
that facility because of the potential additional revenue, and it always
�1
being sold out, which it wasn't, as we know. My question is, are we foolish
to build a facility that is presently offered in the area, and why aren't we
building what was originally scheduled at 18,000?
�
Mayor Suarez: Before you answer that, let's just get straight what the
capacity of the Sportatorium is.
Mr. Odio: 15,000.
Mayor Suarez: The question would be competition - not that they would have
the advantage. It is the possibility that they would prefer that site for
whatever reasons.
Mr. McGee: Well, let me say this, that in most facilities and it is a term in
the industry, we call size two, they are either too large or too small,
predicated upon the event activity for one year.
Mayor Suarez: I understand.
Mr. McGee: Certainly the argument that you make has value, and from a logical
standpoint, makes all the sense in the world. There are other components that
go into it, other than just the total seating capacity, by which would
determine whether or not an event took place or transpired in the facility.
Part of that is a return as to what the rental conditions are, what the other
benefits to the overall economics, with regard to a presentation of the event
in the facility itself. The decision as to whether to go to one facility or
another, is not predicated on seating capacity, but more along the economics
of the terms and the availability of filling those seats.
Mayor Suarez: As long as you are making that comparison, if in fact, we are
competing for an N.B.A. franchise with cities like Minneapolis, and if in _
fact, I believe you gave me the figures, Dean, possibly, or Rick, we are the
Wf,eleventh
television market, and they are the fourteenth television market,=
r
'>
Minneapolis, St. Paul, being three behind us... why would we feel so sure, as
in
we keep reading in the press, and talking to some of the promoters, that we
3
in fact would win out over Minneapolis, after we build this thing?
s ;
Mr. McGee: To addressdirectly...
�r
Mayor Suarez: Are there other factors that go into that...
Mr. McGee: Certainly. You have got to look at the population and population
density. You have got to look at the cable penetration in respective
markets. There is a whole composite of ancillary dollars that could be
garnered, that would support a basketball team. Let me say that the ticket
sales revenue income to a basketball team is only part of the income
opportunity for a team. Certainly the television elements, it enhances... to
draw a comparison between Miami and Minneapolis, with regard to C.B.S.' view
being eleventh and fourteenth respectively, they have an opportunity to garner
more dollars for their commercial positions within the basketball package that
they present. Therein, they generate more income, where in turn each
respective team can generate more dollars directly to the team, by C.B.S.
being able to offer a...
Mayor Suarez: Is it expected that we will be moving up that ladder a lot
quicker than Minneapolis too? Is that a projection, television markets?
Mr. McGee: I am not familiar with those numbers, but I think that, that would
be a fair statement.
Mr. Plummer: What percentage, in your estimation, of a facility such as this
would be dedicated to a franchise?
Mr. McGee: With regards to event activities?
Mr. Plummer: You were successful in getting the N.B.A. franchise. How many
days of play does that give you?
Mr. McGee: N.B.A.'s basketball schedule....
Mr. Plummer: Home games.
Id 18 May 29, 1986
>Y
Mr. Mc Gee:.... is a 41 game home schedule, excluding pre -season and post-
season play. Normally an N.B.A. team will play six to eight pre -season games,
,g
usually, no more than three within domicile that they normally play in. To
a
give you an illustration...
Mayor Suarez: Do you feel that practices don't inhibit other events? Is that
why you don't include them in that?
x'
Mr. McGee: Well, that treated separate and apart. In most instances, the
practice facility for an N.B.A. team is not where the la their home games.
P Y Y play
The facility is made available to the N.B.A. team on an available base,
provided that it is not precluding other event activity in the facility in
most instances.
Mr. Plummer: So what you are saying is...
Mr. McGee: May I finish?
Mr. Plummer: Surely.
Mr. McGee: As far as the post season activity, presently they play three
rounds of the best of four out of seven series, excuse me, and one round of
the best of five series. With home court advantage, you can have an
additional fifteen days on the backside, so you could have a total conceivable
universe of 62 home games.
Mr. Plummer: That is one fifth of the use of the year. How do you, or Decoma
propose to fill it up otherwise?
i
Mr. McGee: We have... I personally...
Mr. Plummer: How many days of play do you have at the Summit?
Mr. McGee: I'm sorry sir. Days of play?
Mr. Plummer: Yes, of use.
r,
Mr. McGee: We run about... we average about...
Mr. Plummer: Yes, of use. For example, the Astrodome is running right about
. ;
300 days of play a year.
Mr. McGee: We run about 180 event days per year.
Mr. Plummer: What was your profit on that last year?
Mr. McGee: That is not public information. I mean, that is...
Mr. Plummer: All right, sir.
Mr. McGee: Let me say that it was sizable.
Mr. Plummer: You made money.
Mr. McGee: Yes, sir, we did.
Mr. Plummer: OK.
Mr. McGee: In answer to your question, we see a universe of concerts, ice
shows, circuses, a potential for rodeo is there, tractor pulls, mud bogs wres-
tling matches, boxing matches, tennis, gymnastics. We will have the capability
of doing hockey, close circuit television...
Mr. Plummer: How many other facilities do you have available in the area?
See, that is one of my problems here.
Mr. McGee: As for as competition to this facility?
Mr. Plummer: Well, surely. We have got the Gusman Hall, which is now taking
subsidy.
Id 19 May 29, 1986
. Y
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Mr. McGee: I, do not....* let me say that I do not see us being competitive
to any existing facility in the City of Miami presently, with the capacity and
the types of events that we are going after.
Mr. Plummer: You are not competitive, but you are taking away from that
5 facility. For example, they have been playing basketball in the Knight
Center, OK? It is to be assumed if you build yours, that they will no longer
` play basketball at that facility. Look, we have the Knight Center...
1Y
Mr. McGee: Let me draw this example for you.
Mr. Plummer: We've got the Spoudatorium.
t
Mr. McGee: In Houston, Texas, presently, there is the summit. There is the
Coliseum, which seats 12,000 people, the Hoffheinz Pavilion, which seats
10,000 people, Astro Arena, which seats 8,500 people, the Astrodome, which
seats 45.000 to 60.000, depending upon event activity. You have got Rice
stadium, which seats about 72,000, and numerous other small theaters, ranging
from 25,000 to 4,000 seats.
Mr. Plummer: Are they all making money?
Mr. McGee: I don't know what the bottom line is to all of them, no, sir. I
know that the downtown facilities are not making money, but that is not a
function of the competition....
Mr. Plummer: Downtown facilities.
Mr. McGee: In Houston. I am specifically referring to the Houston Civic
Center complex, which was built for the I believe, 1932 Democratic National
Convention. I would say that the reason that the facilities do not make money
is several fold. Primarily, there is not an aggressive marketing campaign
going on to market those facilities, and the rental rates are not commensurate
r with what industry standards are. Thank you.
Mr. Dawkins: The gentlemen that is going to do the construction, or
Rk contracting - what is his official title.
Mr. Doyle: Peter Doyle.
Mr. Dawkins: No, official title you are going to have in this.
Y}'�& Mr. Doyle: I'm gonna be the contractor.. I am a partner — our company is a
partner in Decoma Venture, and the builder for the project.
Mr. Dawkins: All right, what is your commitment to the hiring of local
people?
`q Mr. Doyle: Absolutely local, first. We in fact, do not see the need to bring
in labor at all, from outside. Now, if there was some specialty...
Mr. Dawkins: Hold it. Hold it right there. Labor is the least of my
worries, OK? I am talking about electrical contractors, plumbing contractors,
structural steel, and that kind of a thing. I know I can find you all the
laborers you want, and I can find you all of the others, but you seem to don't
be able to find those when you get here.
Mr. Doyle: We are making every effort now to contact the sub market, the
supplier market. We are letting them know we are interested in having them be
the first choice on the project. We also have to take into consideration that
we do have a budget for the project, so we will not absolutely...
Mr. Dawkins: Will you tell us up here... OK, I know how to do that. Mr.
Manager, before we sign anything here, that is approved today, I want their
estimate of every job on here, OK? So, that when an electrical contractor
comes in, he can't send him back, telling him that he is $5,000 over his
budget, unless he showed us that, that is what he has budgeted. Either that,
the only way I am going to accept it, sir...
Mr. Doyle: Well, can I clarify that, you know, a way an estimate is put
together.
Id 20 May 29, 1986
Mr. Dawkins: Let's both clarify... clear it.
Mr. Doyle: OK, we have a guaranteed maximum number. Within that, we are not
guaranteeing any one line item. I mean, because you do have...
Mr. Dawkins: Then, I suggest you attempt to do that. I got stuck with
Bayside like this, sir.
Mr. Odio: Mr. Dawkins...
Mr. Dawkins: No, mans I'm going to tell you guys what I am going to vote on,
now. I'm telling you what I am going to vote on, OK? One vote onlyl
Mr. Odio: Why don't we just ask them plain... say that to hire local
contractors, period.
Mr. Dawkins: No, no, Mr. Manager. I went through this with Bayside.
Mr. Odio: Well, they have to hire local contractors.
Mr. Dawkins: And the only thing... no, I went through this with Baysidel
Mr. Odio: Ok.
Mr. Dawkins: And I will take you out to the Black Allied Contractors right
now, and show you where not a one of them got a contractl And out of the
Latin builders, the only guy that got a contract is Bravo Electric. Now,
these people trusted me because I told them the same thing that Bayside told
me... "We are going to employ local people"
Mr. Odio: But, what he is saying to me, that they will hire local people,
i
period.
Mr. Dawkins: No, he didn't say that.
a
Mr. Odio: That's what he's going to say.
'1
j
Mr. Dawkins: He said he will make every effort to find...
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Mr. Odio: No, no. I took the words...
Mr. Doyle: He is the manager of.....
Mr. Patrinely: We hear you loud and clear.
Mr. Plummer: Well, my question has to be at this particular time, how do you
come up with a cost factor when you don't even have the plans? That is kind
of difficult, in my estimation.
Mr. Patrinely: The design, development drawings, which I believe were
presented, not in a formal capacity, but I personally had them delivered to
your offices, but to look at in detail.
Mr. Plummer: That is the floor plan and the seating plan.
Mr. Doyle% We are having some more sent.
Mr. Patrinely: We are at 75 percent.
Mr. Plummer: Would my office please bring in a set of plans? I'd like my
colleagues to see what was presented to me as...
Mr. Doyle: You are going to see a much larger set on Monday morning, and I
give you the assurance ...
Mr. Plummer: But, we are voting today.
Mr. Patrinely: We are not voting on the... no one is going to sign the final
master agreement between Decoma until the entire Commission is happy with what
they have seen.
Mr. Plummer: Great, that's why we're here.
Id 21 May 29, 1986
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Mayor Suarez: Following up on Commissioner Dawkins concern on local
contractors, is this kind of structure the kind that you are going to tell us
when the time for selecting contractors comes, that it just is not susceptible
of being done by local contractors, because it is unique, or it is the kind of
thing that cannot be done by people in Miami for whatever reason?
2"
Mr. Patrinely Our commitment to the City is to exhaust all the possibilities
locally, and that means with scrutiny, with review by the City and City
departments, and attempt to use entirely local, for example, in a long spanned
a.
structure, which this is, there might not be anybody on the east coast that
does that, but we believe...
Mr. Odio: Yes, there is. I will give you two names.
Mr. Patrinely: You'll give me two guys. We believe we can find all the
talent in contractors, subcontractors locally, and our intent and commitment
to you is begin locally first.
Mayor Suarez: You will give an absolute preference to local contractors.
'
Mr. Odio: Be will.
Mayor Suarez: All other factors being equal, you will select the local
contractor in every case.
Mr. Patrinely: Absolutely. You have a commitment.
Mr. Odio: We will put that in the agreement.
Mayor Suarez: When are we going to hear on the actual return to the City and
the possibility of losses and all of that. Is that from a different
presenter?
wx.r
Mr. Patrinely: Roger Carlton has been very kind to us in waiting in the
wings...... If you don't mind, I would like to suggest that he give you his
ti
ideas of how the parking will work, and then we can get into the business
deal.
Mayor Suarez: That has been a bone of contention, too.
Mr. Roger Carlton: Mr. Mayor and members of the Commission, my name is Roger
Carlton. I am the Director of the City of Miami Department of Off -Street
Parking. I am here today because the Decoma Venture and the Sports and
Exhibition Authority folks have asked me to give you a briefing on what are
some of the potential parking solutions to this project. I think to keep it
in perspective, we should first agree that a major solution is in place
through the Metrorail system and the Metro Mover. The Overtown Metrorail
Station provides a capacity for many thousands of people to leave their car in
the suburbs, take the train downtown, and walk literally a few hundred feet to
get there. There have been conversations that have gone on with the County,
about reversing the way that station unloads so that it comes out both sides,
and that would allow people to walk right into the front door, practically.
The studies that have been done by the consultants to Decoma state that 20% of
the people who would come to this arena would come by Metrorail or Metro
Mover, or Metro bus. I believe that...
Mr. Dawkins: Mr. Carlton, let me stop you right there before you go any
further. Now, I don't know who the consultant is, but he doesn't live here, I
am sure, OK? That is number one. All right, OK, so let's dispense with the
expert. Now, you and I know that we have problems now with the Metro buses.
They are cutting the buses out, so if you are talking in terms of people from
Liberty City, from Edison, and from N. E. Miami getting to the Metrorail to
get to the arena, we are not speaking reality.
Mr. Carlton: Sir, I simply want to say that the assumption that 20 percent of
the people coming to events there, on a sellout event, is a reasonable one.
Whether they...
Mr. Dawkins: OK, you live here. Explain it to me where in all of Dade
County, explain to me now, in what areas you are going to get "x" number of
Percentage and come up with 20 percent of the people. Explain it to me.
ld 22 May 29, 1986
a
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Mr. Carlton: 20 percent of the people is about 4,000 people. It is very
to that those
reasonable assume people...
Mr. Dawkins: No, I don't want no assumptions, now. I want you to give me
i�
V.
t
something which you think is true. Don't assume nothing. Tell me, "I
believe."
Mr. Carlton: I think.
Mr. Dawkins: OK, beautiful. Go ahead, now.
Mr. Carlton: I think that 4,000 people would come in their own cars, park at
a Metrorail station and take the trains in.
Mr. Dawkins: All right. I am going to drive my car, OK? I am going to use
gas, and I am going to pay $1.00 to ride the Metrorail there, and $1.00 back,
is $2.00. I am going to pay $18.00 to get in the game, so for $20.00, Then,
its gonna cost me $20.00 to get to the game, right?
Mr. Plummer: No, knowing you, you are going to buy five or six beers.
Mr. Dawkins: And a hotdogl
Mayor Suarez: I am going to give him a ride to the games, the hell with it.
Mr. Dawkins: No problems.
Mr. Plummer: It is when you are going home D.U.I., that we make our moneyl
Mr. Dawkins: OK, go ahead.
C
f.
Mr. Carlton: I simply want to say, I think that is reasonable. Now, the
other 80 percent, who must drive because they are not transit related, or can
art
i
afford to drive, would clearly want to have parking within a reasonable
m ":f
distance. The assumption of an eight minute walk, in an of itself, even if
Metrorail wasn't there, would provide plenty of parking, because this is off-
3
peak parking, and I will go up to the graphic in a minute and show that, but
,k
let me give you some' real life examples here in Miami that I think are
important about what we call special event parking that already exists. The
first one is for Orange Bowl games. Off -Street Parking today parks about
'4k
1,500 cars for Orange Bowl football games, and let me tell you, that is a lot
more than an eight minute walk, and our lots are crammed to capacity at
�
football games at a $3.00 park. So, there is a real live example, A). B),
5
the Grand Prix. We have a special event parking program for the Grand Prix
that is a combination of public and private facilities serves the Grand Prix
A
needs which is, we hear, close to 100,000 people and it works very well. The
Orange Bowl Parade, hundreds of thousands of people coming into downtown, and
between the buses and trains and everything else, we seem to be able to solve
their needs, and never hear any complaints about it, and then finally, the one
that is probably the most difficult to solve, is in Coconut Grove, where there
_
is no public parking garage today. There is a lot of parking right around
here, but people find their way, because they come to an event that they want
to go to, and they are willing to walk, and it works, so...
Mr.. Dawkins: OK, now, those are one time events, Ok? Mr. Horrow,
approximately how many games will be played at a time? Five nights, six
nights, before they go on the road - approximately how many times they play?
Mr. Rick Horrow; The question is, how many games a week would a N.B.A. team
play?
Mr. Dawkins: Home stand.
Mr. Horrow: An N.B.A. team would play one Tuesday night, and then one game on
a weekend, and then they would go away. I would say two to three games a week
at most.
Mr. Dawkins: Three games?
Mr. Horrow: I would say two to three games a week at most, that's right, well
two is more like it, is that....
Id 23 hay 29,
Mr. McGee: I would say an average of two.
Mr. Dawkins: Two a week?
1u
Mr. McGee: There are some weeks you may have as many as four. u
Mr. Dawkins: Thank you. OK, I don't why they can't understand this. So now,
you are going to tell me that those individuals who will come here and park
their cars, and walk to the art show, are those individuals who will go
someplace else and park their car for one time for the Orange Bowl Parade, one
time, are going to do this for four nights a week?
Mr. Carlton: Well, I think the question is, do the same people come to all
four games.
Mr. Dawkins: Beg pardon?
Mr. Horrow: The question is, does the same person come to all four events in
a week.
Mr. Dawkins: If I buy a season ticket, you bet I will.
Mr. Horrow: And that is what happens, for instance, in the Orange Bowl. We
sell season parking passes in our remote lots, which are very well received,
and people are willing, in that case, every week, or every other week, to make
that walk.
Mr. Dawkins: What is the possibility of the Off -Street Parking putting a
parking garage, and something else on the rest of this land back here?
Mr. Carlton: That is what I would like to show you.
'i
r Mr. Dawkins: Show me that then.
ti�y
fir Mr. Carlton: Right now, these are...
Mr. Dawkins: No, take the loose one, Roger.
' VV Mr. Carlton: These discussions that are going on at the Off -Street Parking
Y Board, and there is some money in our proposed budget which is under
discussion, and which we will bring to you within the next month for your
review, but basically, we have looked at either renting, or buying this piece
of land, as surface...
Mr. Dawkins: The total parcel... —
Mr. Carlton: Part of it belongs to the F.E.C., so we would have to work out
something with them, and we are meeting tomorrow with Roger Bareto from the
F.E.C., to see if we can work together. This is under consideration, could be
bought as a surface parking lot, and then when we see what the demand and the
utilization - this is a prime site for a garage with some sort of commercial
development on top of it, be it a hotel, or whatever. This one is under
consideration. We are also looking at the Max Bauer Meat property, which as
you know, we are trying to do something with Florida A&M Pharmaceutical. That
could be an interim surface parking lot, eventually have a garage, and somehow
tie in to that project and be used at night to support this. We also have lot
10.
Mr. Dawkins: No, no, that is too far. That is too far away.
Mr. Carlton: It is 900 feet.
Mr. Dawkins: From the arena?
Mr. Carlton: Yes, sir, 900 feet, as the crow flies. It is right down here. -_
We have that lot on a Metro mover station in place today, and we haven't
briefed the Commission yet, but the Manager knows about this. There is an
allocation in the State budget... the Mayor has heard about this at D.A.A., to
build a 1,300 car parking garage in the...
Mr. Dawkins: Where?
Id 24 May 29, 1986
Mr. Carlton: Well, the issue is to be decided as to where by State G.S.A. in
cooperation with...
Mr. Dawkins: Where would you locate it? ... on my land here?
�n Mr. Carlton: On City land, right here, and that is a very complex project,
but...
Mr. Dawkins: How far is that lot from Miami Dade Community College?
Mr. Carlton: The next transit station is right here. Let me say that is
maybe 1,200 feet.
Mr. Dawkins: Thank you.
Mr. Carlton: In summary, we are convinced that the existing parking program,
the existing public transit, to whatever degree it will be used, as well as
some things that the Off —Street Parking Board is planning, that we have been
working closely with various City Departments, can meet this need. We are
further convinced that remaining privately owned parcels will instantaneously
become available for parking when this opens because those people will see the
market and the profit. That will add to the availability of parking, so in
summary, I think the parking problem is solvable on this site.
Mr. Dawkins: It is solvable with me if you take the tail end of 57th and put
a parking garage, OK?
Mr. Odio: OK.
Mr. Carlton: You are talking about... I'm sorry, I don't know where that is.
Mr. Dawkins: Right. That is the way — number 480. See where it says 480?
Right there.
Mr. Carlton: We will be glad to work with the City on that.
Mayor Suarez: You also have an idea of an elevated, moving walkway from that
J one lot?
Mr. Carlton: I would like to brief the Commission on that as soon as I can,
being its a very exciting project. You find it?
UNIDENTIFIED SPEAKER: No, that is something else.
Mr. Carlton: We had a graph that I wanted to show you, but it got lost. I
n.� don't know where it is, but soon as I find it...
Mayor Suarez: Is there any... Dean, or anyone, is there any arena similar to
what this would look like and the location and so on, where more than 20
percent of the people use ....make sure I...
Mr. Patrinely: As far as using rapid transit and getting to places.
Mayor Suarez: Right.
Mr. Patrinely: I think Chicago is a good example.
Mayor Suarez: What are the percentages in Boston Gardens, Chicago, whatever?
Mr. McGee: Madison Square Garden, Chicago.
Mayor Suarez: What are those percentages? Any idea how many people go by
car, as opposed to mass transit?
Mr. Dawkins: I think, in order to get a true picture, Mr. Mayor, you should
say, "In what cities with a transportation system comparable to ours, do 20
percent of the people go to the stadium. When you start talking about the
system, and the New York subway system, and the Chicago loop system, you
start talking about transportation systems that move people. You are not
talking about like what we have, sir, So, there is no comparison, in my
opinion.
ld 25 May 29, 1986
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Mr. Fred Silverman: My name is Fred Silverman. I am consultant with Barton
Aschman Associates, and we have been doing transportation work for Decoma, and
I used to work for Metro -Dade for ten years, so I think I know Dade County.
'
When we talk about...
'
Mr. Dawkins: You had something to do with the....
Mayor Suarez: Don't bring Metro -Dade into this now at this particular point.
Fr.
Good idea ... Ok.
Mr. Silverman: When we talk about public transit, OK?... we are talking about
a lot of charter buses, just like the Orange Bowl. When you have a sell out
event, and if these folks are real lucky, maybe twenty, thirty, times a year,
it is going to be total sellout. We will see a lot of charter buses, and that
is really where that 20 percent is coming from, but in big cities where you
have got a really good transit system like New York or Chicago, you are
talking 80 percent, 70 percent, public transit. Where we did some studies in
both Dallas and San Antonio...
Mayor Suarez: You don't know about Boston, by any chance, on the Carden?
Mr. Silverman: I don't know Boston, on the Garden I know Toronto is almost
90 percent on Maple Leaf Garden, but we don't have that kind of transit
system. In Dallas, they run about 15 to 20 percent, lots of charter buses.
That is where we really see that. That is where we see that number come in.
OK, it is not taking the City bus. It is that Charter bus phenomena. I am
going to defer to the Manager, now, as far as...
Mr. Plummer: Well, Mr. Mayor, we can go into whatever other discussion you
want here today. I have done some things here that the City Attorney is
trying to put together. The one area, that before we leave here today, that I
must get into, because it upsets me, is the area of in the potential of
9
subsidy. I am not in any way happy with the way the structure of subsidy will
come about, and what your participation in subsidy is, and what ours is. I
don't think it is fair to the, I say the City, the Authority. I don't think
that, that your potential gain out of this thing is great. Nobody looks at a
contract when everything is going right. It is when things go wrong that
everybody starts reading contracts and lawyers get rich. Now, I am not happy
with the five step procedure of the way subsidy is structured presently. You
s
put no money, for example. into that $3,000,000 reserve fund. None, OK? You
rn
lose your 14 percent on the variable percentage, but on the seat charge, of
which the Authority gets 25 percent, and you get 75 percent, the Authority
loses its 25 percent to subsidy, and according to the way I have it, you don't
give u our 75 percent, and then in the final analysis, you are only
g� P Y P Y Y
responsible for 14 percent of subsidy, where the Authority is responsible for
86 percent, and I've got to tell you something, that is one area that is got
: re=
to be hammered out as far as I am concerned, and the other area that is got to
F
be of course, is the area where you can be dismissed with cause, and I am
j
waiting yet to see the definition of cause, because it has been given reason
to me to believe that that which has been agreed upon, is the fact that the
x,
Authority can give you a termination notice, and you are out the door without
your $7,000,000. And I have got to see the definition of what is cause
Those two areas have got to be covered before we leave here today. The rest
of it we can argue about at a later time.
Mr. Odio: Let, let, can I explain? Again, on the loses, the Sports Au-
thority retains the right to anything they want with the seat charge.
Mr. Plummer: Other than what is spelled out in this document?
Mr. Odio: That not spelled out correct. That is not the final agreement.
Mr. Patrinely: I agree with what you said. You do not lose your seat tax,
nor seat use fee before we do. You get to keep yours, you can do with it what
you want...
Mr. Odio: Do whatever you want with it.
Mr. Patrinely: We get to keep ours. We are on 14 percent, because that is
the ratio of the equity - the equity of the total cost.
ld 26 May 29, 1986
fl
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Mr. Plummer: Well, why was it even brought up if the seat charge was not in
effect? It was brought up to me and made very clear last night.
r
Mr. Odio: That was wishful thinking, but that is not what was agreed upon in
negotiations. The way it is, is the way that he is saying now.
s
Mr. Patrinely: I hear you loud and clear, Commissioner Plummer.
Mr. Plummer: Can I, Can I, does somebody got a final document? I mean, what
assumptions are we traveling on?
Mr. Odio: On the exact assumptions we are going to tell you right now.
}
Mr. Plummer: I am listening.
Mr. Odio: Co ahead, John. Do you have a chart?
Mayor Suarez: When we are talking about subsidy now, what do you mean by the
term subsidy? I am all confused about this. Are you talking about an equity
percentage, equity distribution, is that what...
Mr. Odio: On the losses. If we had a loss, and we...
Mayor Suarez: OK, that has nothing to do with equity.
Mr. Odio: That's has nothing to do with the cash flow - if we lose money...
Mayor Suarez: It has a lot to do with cash flow! It has nothing to do with
equity.
Mr. Odio: Well, no, no. What I mean is, after we pay the loss out of reserve
funds, that we will have a few million dollars.
Mayor Suarez: OK, if it loses enough money cumulatively over... whatever
number of years, that the $3,000,000 is used up, then we begin to have losses.
r
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Mr. Odio: Right.
Mayor Suarez: Now, how are those split? That is what you have been calling
the subsidy?
a `f
Mr. Odio: That is what we are calling the losses. If we have any losses,
after we have depleted all other reserves, they will pay 14 percent of the
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losses, which is their equity, and we will pay the rest.
}
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Mayor Suarez: Does that constitute cause to determine that they have
T
mismanaged the...
Mr. Odio: Well, that is the key. There is a termination with cause where
y)YK '
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they will lose their equity, and if they don't perform, and they do deplete
t
all the reserves. and we get to that point, they might be out of a contract,
and they know that.
Mayor Suarez: That say be an interesting way to define it right then and
Fes}
there. They use up their reserves. That could be cause right there.
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Mr. Odio: That is why termination for cause is based on performance.
Mayor Suarez: No, no. Right, we don't have it in writing.
Mr. Odio: Well, one of the causes is definitely...
.,°
Mayor Suarez: We might want to get that in writing.
;4
Mr. Odio:... they will have to perform according to their performance.
Mayor Suarez: Because at that point, we don't know whether... they may be
insolvent, or bankrupt, or whatever, while we sit around paying 86 percent,
which may be 100 percent.
Mr. Odio: Correct. but see, if we get to that point, Mr. Mayor...
ld 27 May 29, 1986
Mayor Suarez: We can't even switch without a lawsuit, we can't even switch
companies at that point.
Mr. Odio: If we get to that point, they will lose $7,100,000, and they are
not about to do that.
Mr. Plummer: Well, we will argue about that one later again. Question,
because I think you are maybe misleading, from what I understood, of your
negotiators last evening. That $3,000,000 only addresses to a single year.
That $3,000,000, if the period next year was a profit, would be replenished
back in to bring it up to the $3,000,000 level, is that correct?
Mr. Odio: Do you answer that now? Go ahead.
Mr. Plummer: See, this is where we come back to the net and gross income.
Mr. John Blaisdell: Commissioner, this is John Blaisdell, for the record,
from the Department of Development. It is my understanding that there is no
requirement to replenish it. However, in the agreement, there is currently a
mechanism whereby the facility will make a contribution for capital
replacement, which potentially could be utilized in future years to offset any
operating losses. That...
Mr. Plummer: But, that is by the tax dollars.
Mr. Blaisdell: No, no. It is a facility expense. The contribution is
$50,000 every year, and $150,000 every fifth year. It aggregates over a 15
year period, $1,050,000.
Mr. Plummer: John, the first year, the second year, subsidy comes into play,
God forbid, but it comes into play and take a third of it, $1,000,000.
Mr. Blaisdell: Yes, sir.
Mr. Plummer: OK, is it not the understanding that from future years when
profits are made, that there will be monies put back into that fund to
maintain a $3,000,000 fund, because if not, then you go and you are running
the clock on the 86 — 141
Mr. Blaisdell: The answer to your question is no. OK, there is no provision
where that would be replenished for the specific purpose you have indicated.
However, it may be prudent to do that, and that would be something that would
be addressed in more detailed negotiations with the developer and the City and
the Miami Sports and Exhibition Authority.
Mr. Plummer: Am I correct in assuming there are only two reserve funds?
Mr. Blaisdell: Yes, sir.
Mr. Plummer: One is for the indenture of the bonds, or for the debt service
of the bonds.
Mr. Blaisdell: For the debt service of the bonds.
Mr. Plummer: And that is $5.000,000.
Mr. Blaisdell: Yes, sir.
Mr. Plummer: And that was created not from their money, or from the
Authority, but basically, from the bonds themselves, which bring them out to a
net of 32.
Mr. Blaisdell: Yes, it will be created at the time of operation of the
facility.
Mr. Plummer: Plus the interest and the rest. OK, there are no other
reserves.
Mr. Odio: No sir.
Mr. Blaisdell: No, sir, other than the reserve funds.
Id
28
May 29, 1986
"
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Mr. Plummer: OK. Now, let's get back. Once they use up the $3,000,000
reserve fund, are you saying to me then, the only other thing that comes in to
i play is the split of 86 - 14?
Mr. Odio: Yes.
�,. Mr. Plummer: You have eliminated step... what we spoke about last night, you
have eliminated step two, three, four, and we jumped from one to five.
_ Mr. Blaisdell: In calculating when the developer kicks in for his 14 percent
for loss, it currently stands that the seat charge of the Authority will be
utilized in offsetting that, that, in other words, the calculation would be
* seat charge portion of the M.S.E.A., plus operating revenue.
Mr. Plummer: You see?
Mr. Gilchrist: Commissioner, they didn't change that. That is the way it was
last night, but he has agreed to change that, so it is no longer 3n that
fashion.
Mr. Plummer: Are we now then, from our conversation of last night, going from
step one to five?
Mr. Gilchrist: Yes, but in step one is the $3,000,000 reserve. Step two is,
they don't get their......
Mr. Plummer: The 14 percent.
n.
Mr. Gilchrist: ....12 percent variable.
Mr. Plummer: We will argue about that later, because its $16,900,000, but we
will go from there.
L Mr. Gilchrist: But, that is what is in order, sir, and then the next step is
the 14 and 86.
f
Mr. Plummer: OK, now, how did you come about that in negotiations, that we
" are paying the bulk, the 86 percent, yet their only involvement is to the
extent of one/seventh of the total project. Something is not balancing. They
are putting up seven out of $49,000,000, or one/seventh of the total project.
I understand they don't own the project. I understand that.
Mr. Odio: That is the thing. The key is that we own the building 100
percent. The only thing, they are putting $7,000,000 to buy equity from the
.i net cash flow only.
Mayor Suarez: That is an interesting point, because if you take that to its
logical ultimate conclusion, if they invested nothing, they would take
nothing of the losses, is what Commissioner Plummer is saying.
Mr. Plummer: Well, exactly, except, let's go back and use Mr. Odio's numbers
and this isn't what somebody told me, it is in black and white. Father Gibson
said that never lies, OK?
Mayor Suarez: I mean, the percentages could very well be the opposite. We
could say if they only invested 14 percent of the equity, they should take 86
percent of the losses. It would be just as logical as the percentages you
have proposed. I mean, I just don't think there is any particular logic to
that.
Mr. Plummer: Let me give you the logic, Mr. Mayor. Without any equity, if
you wanted to use that as a hypothetical case, they proposed to make, in the
32 years of the contract, Decoms stands to profit $48,908,000.
Mr. Odio: Wait, that is not a good...
Mr. Plummer: Excuse so, Mr. Manager, I am reading from your documents.
Mayor Suarez: In how many years?
Mr. Odio: I also told you, Commissioner, not to use that number, because that
is a very loose estimate. The true number is at the 15 years.
id 29 May 29, 1986
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43, ,
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Mayor Suarez: In how many years now, are we talking about?
Mr. Plummer: Excuse me. No, he doesn't want me to use it, and I did not hear
x
you say that.
Mayor Suarez: Well, give us any projection.
Viz'[
Mr. Odio: No, no, I told you that the 32 years is a very loose estimate. The
true numbers are basically performance of the first 15 years.
-
Mr. Plummer: Let me come at it a different way. In the 32 years, or in the
15... use either scenario. Can I use those numbers?
Mr. Odio: Yes, sure.
Mr. Plummer: In the scenario of 15 years, Decoma stands to make $21,200,000.
That is their profit! All right. The Authority stands to make $10,500,000. or
roughly half. Yet, if it goes sour, if it goes sour, the Authority is
expected to pick up 80 percent, and they are picking up 14 percent. They are
making, or stand to make, in the final analysis, double what the Authority is
making, but if it goes sour, and we have to admit... Dean, excuse my being
blunt, if it goes sour, it is your fault. If it doesn't promote, it is your
fault, OK?
Mr. Patrinely: Not necessarily.
Mr. Plummer: We can't blame the Authority, I don't think.
Mr. Patrinely: You could blame the industry. That is what we are talking
about.
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Mr. Plummer: All right, fine, we'will blame the industry. Whatever reason it
} y
goes sour, it wasn't our fault. You stand to make twice what the Authority
stands to make, yet if it does go sour, you are asking the Authority to pick
up 86 percent, and you only pick up 14 percent. That is the point I am trying
„`.
to make. This does not seem fair and equitable. Now, Mr. Manager, what you
are telling me that Dean agrees that, that has got to be massaged and
reworked? Fine, but when I am handed black and white, this is what I must go
on.
Mr. Patrinely: I haven't had the opportunity to see this, Commissioner, I...
Mr. Plummer: Maybe you are better off than I am.
Mr. Patrinely: I would suggest to you that the notion that the City of Miami
and the Authority is not bound to produce its 86 percent. For example, we are
obligated, and the fact that you own the facility, in a collective sense, I
don't want to get... the public sector owns the facility. After 32 years,
there is a value there. When you buy a house, and you put your equity in, and
someone tells you, "Well, now I own it, but I can't get my equity out", that
is risk. The ratio of seven to 86 or to 50, is the 14 - 86 derivation, if you
have an investment opportunity...
Mr. Plummer: Well, but Dean, you have to go back to the fact that on the
profits...
Mr. Patrinely: I'm not talking about profits...
Mr. Plummer: On the profits, you are making twice what the Authority is.
Mr. Patrinely: Making a number here, if I have a thousand dollars, and I am
going to buy a C.D. for an investment, and most banks are paying 10 percent,
and someone says, "I'm going to give you a lot of money, but it only adds up
to five", which one would you do
Mr. Plummer: If it adds up to, or the potential?
Mr. Patrinely: What we are saying... the potential is what I am talking
about. The interim... the return over 15 years. We look at our equity as
opposed to putting it in a bond...
Id 30 May 29, 1986
U
Mr. Plummer: No, let's look at with what you are talking about, and that is
52 years.
Mr. Patrinely: Well, our contract is only 32...
Mr. Plummer: Your contract is 32, 10 and 10.
Mr. Patrinely: And you can terminate at 17, so...
Mr. Plummer: You can amortize out in less.
Mr. Patrinely: Amortization and return. I am talking about, just with the
return.
Mr. Plummer: Where did you get your tax write off?
Mr. Patrinely: No taxes here.
Mr. Plummer: You get a tax write off on any loss.
Mr. Patrinely: Not... on the contract.
Mr. Plummer: I am speaking now, remember, to the downside. I am not speaking
to the upside.
Mr. Patrinely: I am speaking to the downside. There is no risk to the City
of Miami General Fund. There is no risk to the Authority. The Authority can
only put what it has got in it. We run the risk that, and it has happened in
other situations that we have a contract with a major basketball franchise,
hockey team, long term contracts, and someone decides, "Well, we don't want to
run this thing anymore, we are going to terminate it." We are obligated by a
contract, because we have our money at risk, to come up with our 14 percent.
There is no obligation contractually here, for the City of Miami to put in 86
percent.
Mr. Plummer: The Authority.
Mr. Patrinely: The Authority, yes. The Authority is limited to those.
Mr. Plummer: And if the Authority goes broke, who is going to pick it up?
Mr. Patrinely: Well, you are not obligated to.
Mr. Plummer: No, we are not obligated to.
Mr. Patrinely: That is a risk.
Mr. Plummer: We are just going to let it sit there in the middle of
Park/Overtown and fester! Come on, please!
Mr. Patrinely: Most reasonable people, it is a risk. We have no mechanism.
You can terminate us for cause. We agreed to talk to you about that. I hear
what you are saying.
Mr. Plummer: OK, fine. If you are agreeable to talk. I've got no problem.
Mr. Patrinely: OK.
Mr. Plummer: But, I am telling you, that I can only go and ask my questions
today, based on what I have in front of me.
Mayor Suarez: Net operating income. Give me the definition of that. Does it
include debt service?
Mr. Blaisdell: No, air. Operating income is the revenues generated from the
facility including rental, arena rental concessionaire, the portion of
concessionaire coming in, miscellaneous, merchandising - that is basically it.
Mr. Odio: Less the expenses...
Mr. Blaisdell: Less the expenses of the facility — the net.
Id
31
May 29, 1986
t
'
Mr. Odio: Less the expenses we approve every year through the budget process
and if you, you know... if they are ... by the way.
Mayor Suarez: Can we keep an eye on the expenses?... as you said, approved in
the budget process, to what extent now, do we really have control on the
yearly budgetary...
Mr. Odio: We can argue with them on what budget should be approved and by
the way...
Mayor Suarez: For example, the classic case of reducing your net income, is
you hire your entire family to work...
Mr. Odio: Yes, but they are not going to hire their families.
Mayor Suarez: Do they have large families?
Mr. Odio: The thing is, Mr. Mayor, if we approve a budget, and they exceed
that budget over 115 percent, they will pay the difference out of their
pocket, OK?
Mayor Suarez: OK, now...
Mr. Odio: Now, if we force them, during the year to exceed the budget, then
we, I mean, the Sports Authority, they would be responsible, but if don't
force them to expend any monies outside of that budget, and if they exceed in
their budget, they will have to pay out of their pocket for any excess over 15
percent.
k
Mayor Suarez: I am not saying this is a strict business venture, because I
don't believe it is. I think it is a public facility, really, essentially,
but I just want to clarify one more time - the total income that you project
in any one of these scenarios over the next 15 years, for the City, net
operating income would be approximately how much total?
Mr. Odio: $10,500,000.
Mayor Suarez: If we were going to look at it as a strict business
proposition, obviously we would never get into it, because it wouldn't cover
;(
anywhere near the amount of money that we invested, if you include debt
',._.
service, let alone return on your investment.
Mr. Odio: That is right.
Mr. Patrinely: Except for the value brought to the City by events and hotel
filling, and all of that. That is the value of doing it.
Mayor Suarez: That is a very intangible one, difficult to measure, but we
assume it is worth a lot more than our investment.
Mr. Carollo: Well, I think, Mr. Mayor and my colleagues, that we have beat
this horse enough today, #nd I don't think that there is anything new that is
going to be told to us today that is going to make anyone here change their
minds from what they have already felt from the start. I think that the
bottom line that we have to keep in mind is number one, this City needs an
arena downtown. It is a must for us. Number two, by the actions that this
Commission is asked to take here today, it doesn't mean that we are not going
to further negotiate with Decoma people. So, I think that the initial stage
that needs to be taken has to be taken today and therefore, I would now like
to make a motion to approve the following resolution:
"A resolution authorizing the City Manager to execute a preliminary
development agreement. substantially in the form attached hereto. subject
to the approval of the City Attorney, among the Florida Department of
Community Affairs, Decoma Venture and the City of Miami; which +agreement
provides that the Miami arena may proceed to development, without a
development order for a development of regional impact; subject to
conditions, subject to compliance with City of Miami ordinances and
subject to the execution of a business agreement which provides
indemnification."
I so move this resolution.
id 32 May 29, 1986
'i
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Mayor Suarez:
So moved, do we have a second?
Mr. Plummer:
For the purposes of discussion, second.
Mayor Suarez:
OK, let me very briefly, before we
proceed
with further
discussion among the Commissioners, take... we have one
request
to be heard,
�.-
and I believe
Seth Werner also wants to make a statement. Mr.
Feldman, are
you still here?
Mr. Plummer:
Mr. Mayor, speaking to the motion, is he
going to
speak to the
motion?... to
the motion itself? All right, Mayor, while you
are coming,
addressing, Mr.
Patrinely, speaking for Decoma, sir, and
the motion just made,
I would ask if
you would be prepared to speak to section
14. I am sorry, sir.
Go ahead.
Mr. Leslie Feldman: Mr. Mayor and Commissioners.
Mayor Suarez: State your name and address, please, Mr. Feldman.
Mr. Feldman: My name is Leslie Feldman, 1001 N.W. 159 Drive, Miami. For the
purposes of identification on the record, I have been serving as vice-chairman
of the Miami Beach Visitor and Convention Authority for a number of years. In
1982 and 1983, when we were discussing the expansion of the Miami Beach
Convention Center, I brought a proposal up at that time, that we include in
the projection of expansion of the Miami Beach Convention Center, adding a
second floor to accommodate an arena, so that we could also bring in
professional hockey and basketball. It was on the agenda. We had much
discussion at that level. We had meetings back and forth across the bay, and
we were apprised at that time that there was a firm commitment on behalf of
this body that I am addressing today, that the City fathers assured the
residents of the downtown Miami area that they were going to help in
rebuilding the downtown Miami area to bring economic growth and provide new
f
jobs, and that there was going to be a new arena built, and therefore, it
^;
would not necessarily be appropriate for us to include that in the expansion
`
of the Convention Center. We agreed with that theory at that time, however,
we still kept $100,000 in our feasibility budget, and after lengthy
discussions with Laventhol-Horwath, it was still agreed again by the City
fathers sitting on this side of the bay that a Miami arena would be built for
the downtown area for the benefit of the citizens of this community.
Approximately that same time, I initiated discussions, after hearing that the
r
Miss Universe pageant was in jeopardy in Cartagena, and we invited Harold
~�
Glasser, then president of Miss Universe, Inc., to Miami, specifically Miami
d r
Beach, to help bolster the economic and tourism community. We put together an
entire package, which included funding from the City of Miami Beach, from the
private sector, in addition to Key West. We asked for that same support from
this side of the bay, and it was denied. Mr. Glasser took the Miss Universe
pageant, which we could have had for $450,000, to Knoxsville. The next year
•,
we negotiated, and gave him twice that amount.
Mr. Odio: St. Louis.
Mr. Feldman: St. Louis... excuse me, Mr. Odio, you are correct. The next
year we gave Miss Universe, Inc. $1,000,000, instead of $450,000, to bring it
to the Knight Center, which Miami Beach did participate in, as a partner, in a
spirit of cooperation that we were going to build things together. Currently
we sit with a situation here where we are one of the largest markets in the
United States. We do not have an arena. We have sat here painfully for the
past ten years, hearing from people in the private sector and their grandiose
plans of building arenas with private sector financing, even to the point
where they have run contests to name the name of the team, whether it be
hockey, or basketball. We are still sitting here in 1986, and a shovel has
not been put into the ground. Thankfully, we are on our way to expanding the
Convention Center on Miami Beach, with the help of this Commission, because of
the need to identify that tourism is a major industry in this community. I
don't know if you can really measure the value. I think we can, because we
pay advertising dollars. We have combined our tourism boards, Greater Miami,
Metro -Miami, and the City of Miami Beach. I have the pleasure and the honor
of sitting as chairman of the marketing committee, and we review all requests
for funding. We look at the exposure of the Miss Universe and Miss U.S.A.
pageant, we look at the national network television time, and when you look at
an N.B.A. team with 40 home games a year, plus the potential of a national
ld 33 May 29, 1986
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Pr;
h hockey league team... if and you look at T.V. origination, and then we sit
k here and talk about the potential profits of an arena, as to who would share
At�R those potential profits, as if it would be in concert with the importance of
building a road, Mr. Plummer, with all due respects it is not the same. I
project at this point, with T.V. origination, with the major arena in this
=r area, which would bring jobs to the community, that so vitally needs it, and
the commitment has been made that they would get it, that we would support it,
and that we would see it through. I think it would be unconscionable at this
point, not to act on those promises that we have been making for five years.
1*>- In summation, I would just like to suggest that when you look at an equity
+:- standpoint, when you suggest that possibly the operator sharing in the profits
with the owner and the City, I would only point to the L.A. Forum in Los
Angeles, and Madison Square Garden. I think you would agree they are worth
at least ten times the amount they were built for, and if this City has to
make that capital investment at this time, in a community that so desperately
needs that development, I don't think there is any person here with a clear
conscience that would not vote in favor of this today, and I thank you very
much.
Mayor Suarez: Thank you, Mr. Feldman.
Mr. Plummer: Mr. Feldman, sir, it is very nice for you to come over from
Miami Beach and we would like to have you....
Mr. Feldman: No, I am a resident '`of Dade County.
Mr. Plummer: All right, sir. We appreciate all people to come here and make
their statements known, and we understand the parochialness that exists on the
City of Miami Beach and...
Mr. Feldman: We hope that there is no parochial attitude, because we have
exhibited total cooperation.
r:
ti Mr. Plummer: We would wish that to, Sir. We would appreciate that same
t= cooperation. It is yet to be seen. I think it is very easy for you to come
and comment, and I appreciate your comments. The thing I have to say to you,
sir, is that my comments here today, I think are comments that need to be
said. There once was a City Manager in the City of Miami who made a comment
" that says that this kind of an agreement that cannot stand the scrutiny of
the public should not be. In no way, shape, or form, am I trying to stop an
arena. No, sir, much to the contrary, because my big desire, and I have never
ti made any bones about it, is the exhibition center - not in competition with
t�f you, I don't want one your size, but I think in concert, and I am smart
enough to realize that the only way we are going to get the monies to build
that exhibition center is from the stream of revenue that comes from the
arena. I am not a basketball fan, but this community needs it, and they
`ry ? deserve it, and they are going to get it. My questions here today, sir, are
not whether there should be an arena - there should be, but whether or not
that flow of revenue and the rate returned to the Sports Authority is fair and
equitable across the board. Those are my comments, not as to whether or not
.4s,.the arena should be built, or not. It should, without question!
Mr. Feldman: I agree, and in...
Mayor Suarez: Please, we are never gonna end here. You don't need to go back
and forth. Mr. Feldman, we take note of all of your comments and I gather
that you are generally in favor of us proceeding as quickly as possible on
this project. Is that fair?
Mr. Feldman: That is very fair, your honor.
Mayor Suarez: Now, Seth, you were going to propose... before you say
anything, because I may be able to preempt some of this, if I understand
Commissioner Plummer wanting to discuss paragraph 14 about vested rights for
Decoma and so on. You are going to ask us to wait for 30 days, and of course,
we have a lot of considerations that would suggest that we shouldn't wait 30
days, but before you get into that, maybe we should get a clarification, as
Commissioner Plummer is asking on paragraph 14, because part of the reason you
want us to wait 30 days is so that there won't be any vested rights to Decoma,
in case, and I know a lot of people feel this is not going to happen in the
next 30 days, or maybe in the next 30 years, but in case a private developer
does in fact, yourself, or whoever, begins to build or show the feasibility of
ld 34 May 29, 1986
building a similar facility in Dade County. Depending on how paragraph 14 is
understood, we may have an answer to that question without your presentation.
Commissioner, am I understanding right that you would like to know what
paragraph 14 exactly means in legal terms? Because I would like to know what
it means, and maybe it will answer some of these questions that would be
responsive to the concerns of Seth Werner.
Mr. Plummer: Since I helped to write it, Mr. Mayor, I can tell you the
intent. The intent was that Decoma understands that if passed today, which it
will, if this agreement, that they fully understand section 14, that they have
no upper edge, or no standing, if in the final analysis, they are not chosen
as the developer... on the record.
Mr. Patrinely: We agree. We know what this says.
Mayor Suarez: Now, the rest of paragraph 14, .besides that, says, if I am
reading it right here... there won't be any vested rights unless and until the
City of Miami Commission approves the Miami Arena business terms between the
developers...
Mrs. Dougherty: That is today.
Mr. Odio: That is the business terms you are approving in principle today,
if you choose to do that.
Mayor Suarez: But then, the first part of paragraph 14 says that if we do
approve this, that they do have vested rights, and unless Commissioner
Plummer, has just by...
Mr. Plummer: It shall not create legal rights.
Mayor Suarez: Until that is done, and that will be done today if we approve
i t .
Mrs. Dougherty: There are two contingencies, though.
Mayor Suarez: OK, what is the other contingency that I am missing, then?
Mrs. Dougherty: The Manager has to approve the final agreement.
Mr. Plummer: Mo, according to this, the City Commission does.
Mayor Suarez: That is not what he just answered to me. He said, "until the
City of Miami Commission approves the Miami Arena business terms." That is
where we...
Mrs. Dougherty: That is what is on your agenda today, to approve the business
agreements by the second resolution.
Mr. Plummer: Well, once again, Mr. Mayor.
Mayor Suarez: OK, I see your second condition. "The City Manager approves
the Miami Arena contract." We would be delegating the second part of that
condition, at which time they would have vested rights, and there is no period
of time set out for that.
Mr. Plummer: Well, that is my problem with the second resolution, Mr. Mayor.
Mrs. Dougherty: And the contract has to be executed, so there is actually
three.
Mr. Plummer: See, my problem is...
Mayor Suarez: Oh, the Miami Arena contract presently being negotiated, that
would be between what parties now, the Sports Arena and Decoma?
Mr. Odio: The Sports Authority and them.
Mayor Suarez: Sports Authority, then.
Mr. Plummer; Mr. Mayor, I think for us to vote on a business package today,
without all of the final negotiations being before us, I just don't understand
Id 35 May 29, 1986
how anybody can vote on that) I just don'ts Now, you know, that is saying do
something, right or wrong, do something! We don't have the final agreement
before us. How in God's name can anybody be expected to vote on it. I
guarantee you that if I were somebody on the outside, I would enter a lawsuit,
and school would be out. Now, you are asking me to vote on a final
negotiation. Give it to me. That is all I am askingi Give me a copy of it.
I think the Charter says ... is it defined in there what constitutes cause? No,
it is not in there!
Mr. Turner: Mr. Plummer, again, we are not asking that the final agreement be
approved, but the final agreement is such a complex and all pervasive
document, that we really cannot proceed to prepare that document for your
final review until the business points are basically agreed to in principle.
Mr. Plummer: And all I am asking...
Mayor Suarez: But, basically we would be delegating that final approval to
the City Manager.
Mr. Plummer: That is where I've got a problem, OK? It is preempting the
Commission's right to make that final determination.
Mayor Suarez: OK, Seth, we are going to hear from you.
Mrs. Dougherty: You don't have a right...
Mayor Suarez: Which is the right that wasn't all that clear that we had,
but...Seth...
Mr. Plummer: But, that is the point that I am trying to make. We don't have
the final document. We don't have a set of plans. We don't have any of
this, and yet, we are going to say to the Manager, "Whatever you do is all
right with usl"
Mayor Suarez: Well, no, we are approving, in gross terms, the essential
parameters and we are leaving it to him to work out the details to a very
complicated contract.
Mr. Patrinely: That is correct.
i Mr. Dawkins: Mr. Mayor, let me say something here, so we can get out of here.
Section "C", under five, Madam City Attorney, and Mr. Manager, I would like to
<i have section "C" to read "The provides economic benefits and jobs and
► Project
salaries, by establishing a minority participation program for construction
contracts and employment," period. I don't need no consistent with nothing
else, and that plan should have to come before this Commission, and be OK and
signed off for by this Commission.
Mayor Suarez: Why don't you make it a minority participation program,
acceptable to the Miami City Commission.
Mr. Patrinely: That's fine. That's acceptable.
Mr. Dawkins: That is fine. Anyway, just so we leave out the rest of that,
Mr. Mayor. All right, now let's be sure that I'm like everybody else. I want
to be sure that am understanding what I am reading in 12. Number 12, Madam
City Attorney, says,
"Not withstanding the foregoing, no building permits for the project will
be issued unless, and until the City Miami Commission approves the Miami
Arena business terms between the developer. The City Manager, again..."
As Commissioner Plummer says,
"...approves the Miami Arena contract between the developers and the
developers execute the Miami Arena contract presently being negotiated."
I think that should all of that, since we don't have.... come back to us, and
not to the Manager.
Mr. Plummer: Exactly.
Id
36
May 29, 1986
Mr. Odio: Fine.
Mr. Plummer: See, that is my problem. In this next document...
Mr. Dawkins: Let's change that to bring it back to the Commission, not to
the Manager, OK?
Mr. Plummer: That is fine. That I have no problem with.
Mr. Dawkins: All right, and then when we go to 14, same thing. Take out
where it says back to the Manager, the third line from the bottom, and say,
"Come back to the Commission."
Mr. Plummer: That is fine, and I have no problem with that. None.
Ms. Debbie Orshefski: Excuse me, my name is Debbie Orshefski. I am one of
the attorneys for the Decoma.
Mr. Dawkins: The other gentlemen wanted to speak. Where is he? The Mayor
gave Mr. Werner...
Mr. Plummer: Mr. Werner.
Ms. Orshefski: My comments are on the preliminary development agreement. It
is really just a cleanup item. With the modifications that you have made to
paragraph 5C, this agreement, in drafting it with the Florida Department of
Community Affairs, they are not familiar with the Minority Participation
guidelines that the City operates under. We will be incorporating it as an
exhibit, if that is acceptable.
Mr. Dawkins: OK, well, I have said from day one, and Mr. Dean and everybody
else in here knows that I wanted to see a draft of any minority participation
before you think anything about producing it, and I am sure that every
Commissioner up here feels the same way, so therefore, you will know what we
want in it before we leave this afternoon.
Mr. Patrinely: You have our word.
Mr. Dawkins: Where is the gentlemen that the Mayor gave the right to come up
to the mike.
Mayor Suarez: He is right here, Seth Werner. The problem is, Commissioner,
he wouldn't have any problem with what you are proposing, because then, it is
all up to this Commission again, which creates all kinds of problems for us.
The most important thing is that I don't know if we will be accomplishing
anything today if we leave it up to the Commission totally again, on almost
every term. I said the minority contracting part, because I thought that is a
minor issue, and that the rest of the contract still be approved in
substance. If we don't approve anything today, I am not sure that we are
sending the kind of signal that we wanted to send, certainly, to...
Mr. Plummer: Well, Mr. Mayor, it is always...
Mayor Suarez: And, there is also the problem of potential liability to the
City for retaining all of this authority to approve or disapprove. I don't
know if that is the case.
Mr. Plummer: It is no different. It is no different if you have the City
Manager, or the Commission, if a City official is in final authority, it is
still the same liability. Mr. Mayor, I don't want to reiterate, I am not
going to. It is just the idea they ask me to approve a business plan without
the final in front of me, and without drawings. I am saying.
_ Mayor Suarez: I know we are just talking around and around, but we do that
all the time. We approve the essential parameters and then we leave....
Mr. Dawkins: I withdraw everything about 14 and 15. I mean, I am ready to
vote, whatever...
Mr. Carollo: I call the question on my resolution.
Mr. Plummer: On the first one, right?
ld 37 May 29, 1986
Mr. Carollo: That is correct.
Mayor Suarez: Moved and seconded. It had been seconded for discussion. Do
you want to leave your second in, Commissioner?
Mr. Plummer: Surely.
Mayor Suarez: Ok. Mr. Bufman, Seth, at this point we are going to vote on one
that would not bring it back to the Commission. Do you want to say anything
�.-
against that? I mean, I am not hoping you will, or anything, I just want to
`
give you the right to say it.
Mr. Seth Werner: Thank you, Mr. Mayor. My name is Seth Werner. My address
is 4865 Davis Road, and the only thing that I... I would like to keep this
short. I stated what I have to say in a letter, which had been made available
to the press. We are not trying to stand in the way of any development, we
are only asking that in the event that you are not satisfied, that you give
us, at this stage, the same time that the Decoma people probably need to get
all of their "t's" crossed and "i's" dotted, that is 30 days, and give you an
option, where we believe we will have an alternative arena available to you,
and if we don't, then there is no option, in the meantime you can finish up
your business. If we do have an alternative arena built totally with private
funds and we can demonstrate that to you, then perhaps the funds that were
available for this arena might be available for other uses. That is really
all I have to say. Thank you, very much.
Mr. Carollo: Seth, where is the alternative arena that you are looking at
going to be built at?
Mr. Werner: I would really prefer to wait and give you that in 30 days. All
a
I am askine for is that You people finish up your deal with Decoma...
4
Mr. Carollo:
Can you commit
yourself to building one in the City of Miami
limits?
k
Mr. Werner:
Pardon me?
Mr. Carollo:
Can you commit
yourselves to building one in the City of Miami
'
limits.
• i
Mr. Werner:
I cannot make any commitments at this time whatsoever.
Mr. Carollo:
Well, see, that
is our problem.
Mr. Werner: Well, I understand that.
Mr. Carollo: The only commitment we are looking for is someone that is
willing to build it in City of Miami limits.
Mr. Werner: I understand that entirely. The only alternative we give you
perhaps, and we can't give that to you with any certainty today, is an arena
in Dade County so as the people of Dade County will have the availability of
an arena, and N.B.A. basketball team, and all the other concert facilities,
and at the same time, free up the capital that has been raised to date to use
for an exhibition and convention facility within the City of Miami. That is
all I can tell you.
Mr. Carollo: We understand and respect your feelings, but try to understand
ours and respect ours, that we represent the people that live in the City of
Miami first of all, and that is going to be our main concern and interest.
Mr. Werner: And those people perhaps also have the right to a convention
facility and the like. Thank you.
Mayor Suarez: Since we talked yesterday, I have thought about this, and I
just cannot see sending a signal that says we are going to wait for 30 days.
It just seems like the wrong kind of signal to send. I believe that if within
the next 30 days... this is me, now I am not speaking for the rest of the
Commission, you found, I mean, you actually showed this community that you
were about to build a totally with private funds, another facility like this,
that we would figure out a way to deal with Decoma. I am concerned about
Id 38 May 29, 1986
giving vested rights, as we are about to do assuming that this motion passes,r
"
but I just know that we would figure out a way to convince them to build the
exhibit hall which we need so badly, and we would have the bonds available at
`'
'
that point, but we simply cannot continue to delay on this decision, and I
think it would be the wrong signal to say that it is subject to another 30
�',.'..
days. We have been waiting long time to make a decision on this.
Y B a g
Mr. Werner: I hear what you said, Mr. Mayor, and I appreciate that.
Mayor Suarez: Thank you, Seth.
Mr. Dawkins: And I appreciate your bringing to my attention the parking also,
because the parking is a problem, and through your efforts in bringing it to
my attention, we have been able to at least address it, which means that we
r
are going to find an answer to it.
r
Mr. Werner: I apprec:,.ate that, Commissioner. I must say that of all the
presentations, and this is a yeoman's job to have done what they have done,
and I have got to know these gentlemen, and I believe that they are very fine
businessmen, and you will have a terrific operator of this arena, if it gets
done. Of all the things that concerned me in the presentation today, I
believe that the parking was a little bit swept under the rug, and I would
really urge you to have those "t's" crossed, and "i's" dotted very, very
tightly, because I can see potentially a real problem without adjacent parking
,;.
to this arena, and that has been our problem from day one. Thank you.
Mayor Suarez: It may be that we all feel that all we need to do is give Roger
Carlton a little rope, and all of a sudden we will have parking structures all
'
around this place.
Mr. Dawkins: No, no, parking meters. He won't put structures.
5
Mayor Suarez: Maybe parking meters or structures, Cod knows what! Mr.
f
Bufman .
A
Mr. Carollo: I'm glad you said that instead of something else, like hang
r
himself.
Mayor Suarez: That may be the side effect. At the risk of losing momentum,
now, if you are going to speak in favor of this, we always warn people of that
possibility. We have got a motion and a second, and it may very well pass.
Mr. Zev Bufman: OK, I will be very brief. This is my first time before the
Miami City Commission, although I live in the City of Miami. I know one
thing. If I ever do the play Inherit The Wind, I will come to Commissioner
Plummer and ask him to play Clarence Darrow, because he is terrific, he really
isl I am very impressed. That is a promise, and I like that dimple in the
right cheek, it is terrific!
Mr. Plummer: What do you mean I've got to grow hair!
Mayor Suarez: Now I know it is not going to be unanimous, though! (LAUGHTER)
Mr. Plummer: Hell, I flunked when I played Christopher Columbus, don't worry.
Mr. Bufman : We can bring that back too. I must tell you one thing. Ever
since I tossed my hat in the ring, there has been a wonderful feeling about
the arena. I cannot remember the media, the people, and the City officials
being so excited about a project, since maybe the perfect season of the Miami
Dolphins so many, many, years ago. I seem to have been using sports termi-
nology lately, but it is true when Billy Cunningham says, or when I say, that
we are racing against the clock, not unlike the two minute warning of
football, or that clock in the basketball court, and where we are right now,
truly, in our race to gain a team for Miami, and we have a good chance, is
that we have got three seconds left on the clock, and we are behind by two
points, and we need every second we can get. Don't take those three seconds
away from use let us go get them. Let us go out there and lobby. Let us
bring the team, let the shovel go in the ground, and you will be very, very,
proud of us. Thank you, very much.
Mayor Suarez: What you are saying is, we don't need Billy Cunningham. We
need Larry Bird right now for a three pointer, right? Does the City want to
Id 39 May 29, 1986
propose one further modification here, that the mover might accept? You want
to take out even your right to approve the...
Mr. Odio: I defer to the Law Department here, because it was a technical
question that I had, and I still have.
Mayor Suarez: Is she going to forget the technical question, or...?
Mr. Odio: I don't know.
Mrs. Dougherty: There was some question of whether or not we should take out
the approval of the City Manager, and substitute the Commission. In my mind,
it is both the same, so you either have the approval, or you don't have the
approval. It is up to you.
Mayor Suarez: Well, I think of the two, as far as the signal that we sent, if
we delegate enough authority to the City Manager, that is better, just
because of the public impact of it. Whether any one of the two should approve
it is another question, but I think we are ready to move on the motion, unless
anybody is concerned about this.
Mr. Carollo: I think we are. I call the question.
Mr. Dawkins: Again?
Mayor Suarez: OK, call the roll.
The following resolution was introduced by Commissioner Carollo, who
moved its adoption:
RESOLUTION NO. 86-414
A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A
PRELIMINARY DEVELOPMENT AGREEMENT, SUBSTANTIALLY IN
THE FORM ATTACHED HERETO, SUBJECT TO THE APPROVAL OF
THE CITY ATTORNEY, AMONG THE FLORIDA DEPARTMENT OF
COMMUNITY AFFAIRS, DECOMA VENTURE AND THE CITY OF
MIAMI; WHICH AGREEMENT PROVIDES THAT THE MIAMI ARENA
MAY PROCEED TO DEVELOPMENT, WITHOUT A DEVELOPMENT
ORDER FOR A DEVELOPMENT OF REGIONAL IMPACT; SUBJECT TO
CONDITIONS; SUBJECT TO COMPLIANCE WITH CITY OF MIAMI
ORDINANCES AND SUBJECT TO THE EXECUTION OF A BUSINESS
AGREEMENT; WHICH PROVIDES INDEMNIFICATION.
(Here follows body of resolution, omitted here and on
file in the Office of the City Clerk.)
Upon being seconded by Commissioner Plummer, the resolution was passed
and adopted by the following vote -
AYES: Commissioner Joe Carollo
Commissioner J. L. Plummer, Jr.
Vice -Mayor Miller J. Dawkins
Mayor Xavier L. Suarez
NOES: None.
ABSTAINED: Commissioner Rosario Kennedy
ABSENT: None.
ON ROLL CALL:
Mr. Plummer; On the first motion, I vote "yes".
Mayor Suarez: What does that mean?
Mr. Plummer: The first motion...
Mr. Carollo: Well, I have a second motion that I am going to bring up.
Mr. Plummer; The first resolution is to allow them to proceed with the D.R.I.
The second one is the acceptance by this Commission of the business package.
Id k0 May 29, 1986
L Y
x
4 -
i V
i
Mr. Carollo: OK, now...
Mayor Suarez: Is that the way the motion was phrased?
Mr. Plummer: Yes, he read from the resolution, which...
Mr. Carollo: I read one motion.
Yx
Mr. Plummer:... you have in front of you.
t q
_`..t._
Mayor Suarez: OK, well, we will take it that way. I vote "yes" on the first
motion.
Mr. Carollo: The second motion, I so move it, is
"A resolution authorizing the City Manager to execute a land use
`
agreement, between the City and the Miami Sports and Exhibition
Authority, in a form acceptable to the City Attorney, and incorporating
s
certain terms and conditions; furthermore authorizing the City Manager
to approve on behalf of the Commission the development agreement
'
between the Authority and the Decoma Venture provided it is consistent
with terms and conditions as set forth herein."
I move the stated resolution.
Mayor Suarez: So moved. Do we have a second? I will second the motion.
Mr. Plummer: I would like to make an amendment to the motion to substitute
the word, 'Manager' for 'City Commission', and to substitute the word 'final
authority' for 'conceptual`. We do not have the final agreement before us,
and I don't know how we can be asked to vote on an agreement we don't have. I
think by doing that, it gives this Commission the right to look out for those
rr
things that they were concerned about, and in the final analysis, we have a
final document in front of us. I offer that as an amendment.
r
Mr. Dawkins: Do we have a second to that amendment?
Mayor Suarez: Does the mover accept the amendment?
Mrs. Dougherty: I don't understand it I don't understand the amendment.
Mayor Suarez: If we change it to that, we are not approving anything today.
Mrs. Dougherty: I don't understand the amendment.
Mr. Plummer: Well, we are. We are sending a message to the N.B.A. that we
approve in concept the agreement as been proffered. It is not locked in
stone, and of course, my contention is, how can you lock in stone that which
you don't even know. The other one is, that it gives this Commission the
final authority, rather than the Manager, because it's still contained in the
document, let's recall, that any liability that might be created is because it
still contains the motion you just passed, I want to remind you. It says that
the City can withhold their building permit. That was in the first motion.
Mayor Suarez: Yes, but that is subject to specific conditions on withholding
a building permit, not just at our discretion.
Mr. Plummer: OK, I made my points for the record.
Mr. Dawkins: So, there is no second for the amendment, so therefore I guess
we go back and vote on the first, the original motion?
Mr. Carollo: Original motion.
Mr. Plummer: Right.
Mr. Dawkins: Call the roll.
Id 41 May 29, 1986
�. The following resolution was introduced by Commissioner Carollo, who
moved its adoption:
RESOLUTION NO. 86-415
A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A
LAND USE AGREEMENT, BETWEEN THE CITY AND THE MIAMI
SPORTS AND EXHIBITION AUTHORITY, IN A FORM ACCEPTABLE
TO THE CITY ATTORNEY, AND INCORPORATING CERTAIN TERMS
AND CONDITIONS. FURTHERMORE AUTHORIZING THE CITY
MANAGER TO APPROVE ON BEHALF OF THE COMMISSION THE
DEVELOPMENT AGREEMENT BETWEEN THE AUTHORITY AND THE
DECOMA VENTURE PROVIDED IT IS CONSISTENT WITH TERMS
AND CONDITIONS AS SET FORTH HEREIN.
(Here follows body of resolution, omitted here and on
file in the Office of the City Clerk.)
Upon being seconded b Mayor Suarez the resolution was passed and
p g Y Y
adopted by the following vote -
AYES: Commissioner Joe Carollo
Vice -Mayor Miller J. Dawkins
j Mayor Xavier L. Suarez
NOES: Commissioner J. L. Plummer, Jr.
- ABSTAINED: Commissioner Rosario Kennedy
C
ABSENT: None.
Mr. Plummer: So be it.
THERE BEING NO FUtTBTIt BUSD(E.SS TO COME BEFORE THE CITY COMMISSION, THE
MEETING WAS ADJOURNED AT 4:29 P.M.
9
f Xavier L. Suarez
MATOR
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14 42 May 29, 1986
CITY Ph �+IAMI
DOCUMENT
MEETING DATE
�} �roonr o�nrco �}
MAY 29, 1986
RE
DOCUMVIT IDENTIFICATION CLAM ONCN AND tO EIEVAI NO.
AUTHORIZE CITY MANAGER TO EXECUTE A PRELIMI—
NARY DEVELOPMENT AGREEMENT IN THE FORM
ATTACHED HERETO, AMONG THE FLORIDA DEPART—
MENT OF COMMUNITY AFFAIRS, AND DECOMA VENTU—
RE; ETC....
AUTHORIZE THE CITY MANAGER TO EXECUTE A
LAND USE AGREEMENT WITH THE MIAMI SPORTS
AND EXHIBITION AUTHORITY, INCORPORATING
CERTAIN TERMS AND CONDITIONS; ETC...
86-414
86-415