HomeMy WebLinkAboutItem #10 - Discussion Itemn
GROVITES UNITED TO SURVIVE
G. U. T. S.
June 27th, 1984
Mr. Howard Gary, City Manager
Miami City Hall
3500 Pan American Drive
Miami, Florida 33133.
Dear Mr. Gary:
For a number of years the residents of Coconut Grove have been
anxiously awaiting the redevelopment of the Grand Avenue and Douglas
Road intersection as the first step in the economic revitalization
of our community.
As a result of our commitment and concern,and with the help of the
Coconut Grove Local Development Corporation, we have incorporated
the for -profit group, Grovites United to Survive (G.U.T.S.), to
establish a vehicle for allowing the community to stimulate and
control this redevelopment process. As such, during the last 60
days, we have invested over $130,000 of our own funds to purchase
the TIKI Club 65 year lease and thus control the Northeast corner.
We have also purchased the Southeast corner including Gil's Spot
and the Familv Home Furniture Store.
Having committed our funds to the above, we are requesting that
the City of Miami make available to our group the amount of Five
Hundred Thousand ($500,000) in long-term, low interest loans to
complete the acquisition of adjoining properties and the rehabili-
tation of the TIKI buildings.
Through your efforts and those of the Community Development Office,
we have secured the services of an architect who is preparing plans
for our use. He has informed us that TIKI building is in structu-
ally excellent condition, therefore all that needs to be done is
the interior and exterior rehabilitation,including new plumbing
and electrical installations.
We hope that you will support our request for these funds, because
we all feel that this will serve as an outstanding example of
Private Sector, Community and City government cooperation for the
benefit ol' all our citizens.
Sincerely yours
Walter Green -President
Thelma Anderson -Gibson, Vice President
myp�iffl
. j
r
GROVITES UNITED TO SURVIVE
"TIKI" P-ROJE:CT F011\f4f1_ATION
In January 1984, a group of private citizens representing the minority
Community of Coconut Grove, Florida decided to incorporate a for -profit company
to purchase and develop real property primarily within, the commercial area of
Coconut Grove. The prime purpose is to transfer real properties into local,
rig
minority control to protect the character, ambience and historical integrity
of f0 ami's oldest black community.
The intrinsic value of this venture precluded the possiblity of a lead invest-
i ment role by the local government and due to the exigencies of increasing non-
_
minority, non -local investment in the area, it was decided that certain projects
would be tied up through purchase agreements, with development and rehabilitation
funding and grants to be sought after purchase was ensured.
-
r
f PHASE 1
N.E. corner of Grand Avenue at the intersection of Douglas Road, known as the
l
TIKI properties. This project consists of the acquisition of five (5) lots,
three inclusive of the TIKI club and gas station, with two adjoining lots for
spillover development. Benefits apart from intrinsic minority control include:
b f' hopportunities. 1. Tax ene its/s el ter
2. Capital appreciation.
3. Equity build-up (amortization effect)
4. Cash flow/Cash-on-cash return.
5. Reduced risk due to unique )everage
j Other values, quantifiable and non -quantifiable include emergence of a serious,
_! committed private sector organization determined to reverse economic decline and
�! rampant crime perceptions; status and recognition of positive minority controlled
community enchancement;and specific opportunities for employment expansion and
increased sales through attraction and capture of disposable income from potential
consumers previously identified through market studies.
i
RATIONALE FOR PUBLIC GRAftiTS
This project, through the unique synthesis of available opportunities, will
enhance employment- by offering jobs through the inhouse fccilities, will strenghten
the local er,iployr,rent base which is primarily formulated froo. a large, readily
available pool of trained landscape and maintence minority personnel; increase
the tax revenue; increase capital values and real property values by reversinc the
current downside trends and will protect past investments by both city and county
governments.
LEAD TIME
Due to the case of start up and given the availability of the properties,
lead tirrc is minimal. The project: can be built and operating within six months
and the target da;.-.es for project completion is scheduled for January 1985.
GUTS is in a position to move immediately, due to the positive results of real
,property ownership conversion, and will need assistance from public sector
agencies to support the project enough to cut red tape, coordinate its agencies
and facilitate negotiations. G11TS is also seeking protection and limited
exposure through grants and low -interest loan guarantees.
PPE -DEVELOPMENT STUDIES
GUTS is requesting apre-development grant in the region of $25,000 to
initiate certain necessary plans and services and to determine the viability
of rehabilitation versus demolition and reconstruction of existing structures.
PUBLIC FACILITIES
Discussions have already begun for public facil=ties on an adjacent site which
would provide parking and pedestrian inflow for the project. A sidewalk brick
project has been initiated which needs to be extended through the development
area.
GUTS is seeking a combination of low interest loan and grants in the amount of
$500,000 to cover remaining acquisition and redevelopment costs. These will
include all structural enhancement, Fixtures and Fittings, Architectural and
Engineering, Demolition and Removal and HVAC.
The following is an estimated breakdown of cost catergories:-
Land Acquisition 100,000
Demolition and Removal 11,500
Interior Rehabilitation
(a) Structural 87,000
(b) Electrical 20,000
(c) HVAC 28,000
(d) Floors 26,000
(e) Wails/Acoustics 12,500
k"�mod 6
ROBERT F. CLARK, Deputy itv At•*---
,! -3-'
r
TIKI PROJECT PROFORMA
The base rent that tenants will he willing to pay is not projected to exceed
$9.004 however, since CUTS will play an active role in business startup and
emplacement. 100',, rental is projected 'Co be the first. year,, occupancy. For
purposes of this Proforma, first. year occupancy will be 007;, second year's
80%, third year'9 0%>, and thereafter level. If this goal is achieved, then
the profit will exceed revenue expectations, becaisse the developer will
realize percentage rents as the sales of the tenants increase. Baseline
rents will be increased 1%/year over the first five (5) years.
Net Revenue:
Base Rent(A): 51,840 69,811 79,322 80,116 80,917
Percentage
Rent (B) - - - 8,011 9,710
Debt
Service:( ) 66,798 66,798 66,798 66,798 66,798
Base Tax
Cash Flow:-14,958 3,013 12,524 21,329 23,829
Exterior Rehabilitation
Roof 18,000
Facade 22,000
Parking Lot 17,000
Furniture & Fixtures
Equipment:
Catering 43,700
FSound and Light 37,400
Rest Rooms 30,000
Offices 20,000
Architectural & Engineering
A & E 44,000
Marketing 26,000
Costingency 40,000
Total 500,000
(C) Initial investment 185,000 at 11.5 percent interest rate .
!! ROBERT F. CLARK, Deputy itv A+-�-