HomeMy WebLinkAboutItem #59 - Discussion Itemi
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QVLI�LL1 t_C�C�lU- IJIJ�-1 Roger M. Carlton
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March 11, 1986
Honorable Cesar Odio
City Manager
-, City Hall
3500 Pan American Drive
Miami, Florida 33133
Dear Cesar:
During the past two years, the Coconut Grove Playhouse Board (the
Playhouse), members of the Dade County Legislative Delegation, the Secretary
of State, and the City of Miami's Department of Off -Street Parking (the
Department), have been working together in an attempt to find a common
solution to two important problems -- specifically, the Playhouse's continuing
and growing need for financial support and the significantly -increased demand
for parking in the Coconut Grove area.
As you are aware, the Playhouse is located on approximately ninety
thousand square feet of State-owned land on Main Highway in Coconut Grove.
The theatre edifice itself utilizes about thirty thousand feet and the
remainder is used for ground -level parking which is operated by the Department
of Off -Street Parking (the "Department"). The logical solution to hoth
problems appears to be that the land currently used for ground -level oar'tino
be converted to its highest and best use -- in this case, a combination of
theatre functions, retail stores, office space, and parking.
After extended negotiations, the Playhouse and the Department have
agreed in principle to the following approach which will, of course, require
approval at the State Cabinet level and eventual review of a Parking Revenue
Bond to be issued by the City on behalf of the Department:
1. The Department would enter into a ninety-nine year lease with
the State for the. purpose of constructing on the property a parking facility
of approximately 500 spaces. The lease would permit the development of up to
110,000 square feet of privately -funded retail and office areas and would
require the construction of certain Playhouse infrastructure items including,
but not limited to, warehouse space and a small experimental theatre.
2. In exchange for the right to use the land for parking
facilities, the Department would:
Department of Off Street Parking 0 190 N.E. Third Street Miami, Florida 33132 305-579-6769
a. Pay to the Playhouse
for continuing, under the terms
Department and the State of Florida,
at the Playhouse during the contract
phases.
$100,000 immediately as compensation
of the present lease between the
to operate the ground -level park inq
negotiations and the facility design
b. Pay an annual rental of $200,000 to the Playhouse Trust
Fund as compensation for the use of the site for parking only, such rental
to increase by three percent per year compounded annually commencing in
the fifth year of the lease term.
c. On behalf of the Playhouse, pay for the construction of up
to $1 million of the infrastructure improvements needed by the Playhouse.
The Playhouse would repay such monies to the Department over the life of
the lease, but only to the extent that Gross Revenues received by the
Playhouse from operation of the retail and office portions of the oroiec`
exceed a first -priority payment by the private developer to the ?lavnouse
of $60,000 per year. This annual, second -priority repayment Nculd be
limited to the amount of the Department's accumulated debt service caused
by such infrastructure expenditure. All additional annual Gross Revenues
would accrue to the Playhouse. Upon repayment in full of Vie
infrastructure expenditure and related financial costs, all such payments
by the Playhouse to the Department would cease.
3. The Department would work closely with the Playhouse, the State,
and any other parties designated by the State to prepare a request for
Proposals (RFP) from private developers to develop the retail and office
portions of the project. The RFP would include nationally -recognized,
independent third -party appraisals of the value of the property for private
development purposes. The minimum acceptable annual rental amount for the
retail and office portions of the project would be recommended by such
appraisals.
4. The proposed transaction would assure the Playhouse a minimum of
$260,000 in annual financial support -- t200,000 from the Department and at
least $60,000 from the private developer. It would immediately provide oadly
needed infrastructure facilities for the Playhouse which would be constructed
by the Department. Should rental payments from the private developer meet
expectations, additional annual support for the Playhouse could exceed
$200,000 after payment to the Department of infrastructure related debt
service. During the Bond payment period and thereafter until the expiration
of the Lease, the Department and the Playhouse would share equally in Net
Revenues of the Parking Garage above the Department's legally required 1.25
debt service coverage minimum. The transaction would also permit the
Department to fulfill its goal of providing adequate parking facilities for
the citizens of Miami while at the same time providing assistance to the
Playhouse and the City's development process in Coconut Grove. The Department
fully supports this project and will work diligently to aid in its success.
We must emphasize, however, that the Department is not a developer, limits
itself to parking activities only, and, as such, can assume responsibility
only for the success of the parking as distinct from the private development
aspects of this effort.
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5. Counsel for the Department has been instructed to work closely
with the City Attorney, the Attorney General's office, bond counsel. 3nd
counsel for the Playhouse in order to assure that an appropriate leaal
I structuring which will at all times protect the financial integrity of the
transaction is available.
It is the intention of the Department to present this transaction for
formal approval by the Department's Board of Directors on Wednesday, March
12. Such approval, in presumption that good -faith negotiations would begin
expeditiously among the interested parties, would occasion the immediate
payment of $100,000 to the Playhouse. Because of the urgency of the
Playhouse's financial requirements and the complexity of the negotiations, we
have been unable to deliver this transaction summary to the City Commission
and City Manager until this date. It is our. inter questthat_,; he
transaction be scheduled for, an upcoming "Committee Vf"Thlllhoiei discussibn
at the earliest practical daM.
e,
The Off -Street Parking Board appreciates your support of this most
needed project and your understanding of the complexities of the transaction
due to the many participants in the negotiation process and the many diverse
goals Which were considered.
Sincerely,
LP/WpC
374H121A
cc: Roger Carlton
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Leslie Pantin, Sr.
Chairman of the Board, Department
of Off -Street Parking