HomeMy WebLinkAboutR-83-0326J-83-256
rr RESOLUTION NO. 83
A RESOLUTION AUTHORIZING THE CITY MANAGER
TO APPOINT THE FIRM OF LAVENTHOL AND
HORWATH, AS CONSULTANTS, TO PREPARE AN
UPDATE OF THE EXISTING FEASIBILITY STUDY
AND SUBMIT A RECOMMENDED SCHEDULE OF
RENTS, RATES, FEES AND CHARGES FOR THE
USE AND OCCUPANCY OF AND FOR THE SERVICES
FURNISHED OR TO BE FURNISHED IN
CONNECTION WITH THE CONVENTION CENTER AND
PARKING GARAGE OF THE CITY OF
MIAMI/UNIVERSITY OF MIAMI JAMES L. KNIGHT
INTERNATIONAL CENTER; SAID APPOINTMENT TO
BE CARRIED OUT IN ACCORDANCE WITH SAID
FIRM'S ATTACHED PROPOSAL; COMPENSATION
UNDER SAID APPOINTMENT, INCLUDING
EXPENSES, SHALL NOT EXCEED $18,000,
SUBJECT TO AVAILABILITY OF FUNDS.
WHEREAS, the City of Miami/University of Miami James L.
Knight International Center opened in 1982; and
WHEREAS, the City has covenanted in the Trust Indenture
securing the Convention Center and Parking Garage Revenue
Bonds in Article V Section 501 that a Consultant will be
appointed to prepare and submit a recommended schedule of
rents, rates, fees and charges for the use and occupancy of
and for the services furnished or to be furnished in
connection with the Convention Center/Garage of the City of
Miami/University of Miami James L. Knight International
Center; and
WHEREAS, the firm of Laventhol and Horwath prepared the
feasibility study which supported the Bond Issue and which
has been used as a basis for preparing the first operating
budget for the Convention Center; it is therefor reasoned
that this firm would be in an exceptional position of
expediting the preparation and submission of an update of
this feasibility study and of the required schedule of rents,
rates, fees and charges and relating the schedule to the
feasiblity study;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE
CITY OF MIAMI, FLORIDA:
CITY COMMISSION
MEETING OF
APR 6 1983 ry�ry
RF SOUf f A.e tip. 83-32
RIM R Ka
Section 1. The City Manager is hereby authorized to
appoint the firm of Laventhol and Horwath as Consultants for
the purpose of preparing and submitting an update of the
existing feasibility study and a schedule of rents, rates,
fees and charges for the use or occupancy of and for the
services furnished or to be furnished in connection with the
Convention Center and Parking Garage of the City of
Miami/University of Miami James L. Knight International
Center in accordance with said firm's attached proposal.
Section 2. Compensation for said firm under this
appointment, including expenses, shall not exceed $18,000,
subject to the availability of funds.
PASSED AND ADOPTED this 6th day of April , 1983.
Maurice A. Ferre
MAURICE A. FERRE
M A Y 0 R
ATTEST:
QTALP ' G. ONGIE, CITY CLE
PREPARED AND APPROVED BY:
ROBERT F. CLARK
DEPUTY CITY ATTORNEY
APPROVED AS TO FORM AND CORRECTNESS:
JITSYE R. GARCIA-PEDROSA
ATTORNEY
-2-
83-326
r]
11
LAVENTHOL & HORWATH
CERTIFIED PUBLIC ACCOUNTANTS
Mr. C. Dean Hofineister
Executive Director
James L. Knight International Center
150 S.E. 2nd Avenue, 12th Floor
Miami, Florida 33131
Dear Mr. Hofineister:
201 ALHAMBRA CIRCLE
CORAL GABLES. FL 33134
f305) 442-2000
TELEX264822
A MEMBER OF
HORWATH 3 HORWATH INTERNATIONAL
WITH AFFILIATED OFFICES WORLDWIDE
March 14, 1983
In accordance with your recent meeting with Mr. Chase
Burritt of our firm and Mr. Randolph Rosencrantz, Assistant City
Manager, we are pleased to submit this proposal to perform addition-
al consulting services for the James L. Knight International Center.
In this proposal, we describe, in brief, the purpose and
scope of the study, the approach we will take in conducting the en-
gagement, the final report and the estimated time requirements and
fees.
BACKGROUND
It is our understanding that the City of Miami is consid-
ering the retention of Laventhol & Horwath as independent consul-
tants in order to meet certain obligations established by the Trust
Indenture dated July 1, 1980 between the City of Miami and the Flo-
rida National Bank of Miami.
83-3'o
P�
til
Mr. C. Dean Hofineister -2- March 14, 1983
Specifically, you have requested that we review and prepare
reasonable projections of utilization for the Center, apply a sched-
ule of rents, rates, fees and charges to the projected performance
levels and prepare projections of cash flow available for debt ser-
vice for the next five full years of operation of the Center. We
further understand that our projections, based on reasonable assump-
tions, will be utilized by both you and the City of Miami in prepara-
tion of their annual budgets.
PURPOSE AND SCOPE OF THE STUDY
The objectives of our study will be:
To determine the market position of the
James L. Knight International Center,
currently and in the future, by review-
ing each of the two major revenue -pro-
ducing areas (meeting and function space
and parking) separately and as a whole.
. To project each entities' utilization
for the five-year period 1983-1987.
. To project the financial operating re-
sults for the next five-year period.
APPROACH TO THE STUDY
The major segments of the study are described as follows.
83--326
W W
Mr, C. Dean Hofineister -3- March 14, 1983
MARKET REVIEW
Conduct a market review of the James L. Knight Internation-
al Center (JLK) in order to prepare various reasonable assumptions
concerning its current and future position within the marketplace.
This review will include:
Meeting and Function Space
Reanalyzing the original market study
conducted in June 1980 and the updated
letter addressing rates charged, issued
in February 1982.
Examining the historical performance of
the JLK by inspection of the operational
records maintained by the Center, the
Hyatt Regency Miami and the University
of Miami.
Reviewing the marketing approach util-
ized historically and that which is pro-
posed for use in the future.
Updating, where necessary, performance
levels at other centers including the
Miami Beach Convention Center, Coconut
Grove Exhibition Center, Gussman Hall
and others.
Obtain supplementary market data on Dade
County, Downtown Miami and on the conven-
tion/meeting markets. This will entail:
... Reviewing our findings of the mar-
ketplace as of 1979 and update or
revise any of the resulting assump-
tions or conclusions where deemed
appropriate.
... Interviewing governmental and com-
munity agencies in order to obtain
information on future developments
and activities in Miami.
83-321
■
Mr. C. Dean Hofineister -3- March 14, 1983
MARKET REVIEW
Conduct a market review of the James L. Knight Internation-
al Center (JLK) in order to prepare various reasonable assumptions
concerning its current and future position within the marketplace.
This review will include:
Meeting and Function Space
Reanalyzing the original market study
conducted in June 1980 and the updated
letter addressing rates charged, issued
in February 1982.
Examining the historical performance of
the JLK by inspection of the operational
records maintained by the Center, the
Hyatt Regency Miami and the University
of Miami.
Reviewing the marketing approach util-
ized historically and that which is pro-
posed for use in the future.
Updating, where necessary, performance
levels at other centers including the
Miami Beach Convention Center, Coconut
Grove Exhibition Center, Gussman Hall
and others.
Obtain supplementary market data on Dade
County, Downtown Miami and on the conven-
tion/meeting markets. This will entail:
... Reviewing our findings of the mar-
ketplace as of 1979 and update or
revise any of the resulting assump-
tions or conclusions where deemed
appropriate.
... Interviewing governmental and com-
munity agencies in order to obtain
information on future developments
and activities in Miami.
83-326
QUA
Mr, C. Dean Hofineister -4- March 14, 1983
Parking
Examine the parking garage in order to
determine its competitive position with-
in Downtown Miami. This will include:
... Reviewing the original analysis
conducted in June 1980.
... Analyzing the historical perfor-
mance of the parking garage and
its corresponding rate structure(s).
... Interviewing other parking garages
in downtown Miami to determine their
utilization levels and rate struc-
tures.
... Determining the likely impact of
additional parking garages in down-
town Miami on the future performance
of the JLK's parking garage.
This market review will, in turn, provide the basis for
a number of reasonable assumptions including:
The current and anticipated future posi-
tion of the James L. Knight International
Center.
A recommended schedule of rents, rates,
fees and charges for the use and occupancy
of the JLK, the parking garage and the re-
tail space.
PROJECTED UTILIZATION
At the conclusion of the market review, we will then be
in a position to project the future utilization factors for the
Center, parking garage and retail area. This aspect of the engage-
ment is briefly discussed below.
83-32L
Mr. C. Dean Hofineister
-5-
March 14, 1983
We will project utilization levels for the James L. Knight
International Center's two main revenue areas, namely, the meeting
and function space and the parking garage. The information utilized
for our projections and data provided will include:
Meeting and Function Space
Parking
A historical analysis of the market seg-
ments which utilized the JLK Center and
the type of function rooms they required.
A review of the number and type of tick-
eted and nonticketed events held in the
JLK Center and a determination as to their
future growth potential.
An analysis of the existing demand for
meeting and function space at the JLK
Center and their likelihood to increase
in future years.
Projections of utilization for the meet-
ing and function space for the next five-
year period, 1983-1987.
A determination will be made as to a sched-
ule of rents, rates and fees charges that
should place the JLK facility in a competi-
tive market position.
An assessment of the current parking
operation and review of its historical
utilization levels and operational per-
formances.
A determination will be made as to the
volume of parking demand in the Downtown
Miami marketplace.
. Projections of utilization for the JLK's
parking garage will be completed for the
1983-1987 period based on the garage's
future competitive position.
83-3;
Mr. C. Dean Hofineister -6-
A schedule of parking rates will be pro-
vided that should place the garage in a
competitive position within the Downtown
Miami marketplace.
FINANCIAL PROJECTIONS
March 14, 1983
Subsequent to the various market and position research
tasks and a determination of a series of reasonable assumptions con-
cerning the Center's utilization and rate structures, we will then
project the JLK's financial operating results. This aspect of the
engagement follows.
Financial projections will be prepared to the point of
cash flow available for debt service for each of the Center's three
entities. The projections will be prepared for the five-year period
1983-1987 and will be expressed in both constant (uninflated) and
current (inflated) dollars. The statements will include:
James L. Knight's Meeting and Function Space
Revenues for the meeting and function space would be gener-
ated from the following sources:
• Rentals of the main theatre/auditorium.
• Rentals of the meeting rooms.
Charges for equipment rental, the
provision of ancillary services and
other miscellaneous items.
Contributions from the Hotel devel-
oper for marketing and promotions.
83-.326
.r. C. Dean Hofineister -7- March Ar 1983
Operating_ expenses will be projected within the following
categories:
Payroll and related
Marketing
Utilities
Repairs and maintenance
• Supplies
• Telephone
• Management fee
Insurance
Miscellaneous
Parking Garage
Projected parking garage revenues will be based on rental
rates from:
• Monthly parking rates
• Short-term parking
• Daily rates
• Hotel guests (day and overnight) ■
Special events
83-326
i
Mr. C. Dean Hofineister
a
Expenses for the garage will include:
• Payroll and related
. Utilities
• Repairs and maintenance
• Telephone
. Miscellaneous
March 14, 1983
A consolidated statement will be provided which will in-
corporate each of the individual revenue -generating components, pro-
viding a composite statement of cash flow before debt service for
the next five years of operation. This statement will also be ex-
pressed in terms of constant and current dollars.
FINAL REPORT
We will present a written report containing our findings
from the market review, schedules of rents, rates, fees and charges,
bases of our projections and projected financial operating results
for 1983-1987. Our report will not ascertain the legal and regula-
tory requirements applicable to this project, including zoning, other
state and local government regulations, permits and licenses. Fur-
ther, no effort will be made to determine the possible effect on this
project of present or future federal, state or local legislation in-
cluding any environmental or ecological matters or interpretations
thereof, including effects of energy shortages.
83-326
Mr. C. Dean Hofineister
-9-
March 14,
1983
The report will
be based
on reasonable assumptions
and
other information developed from a review of the market, knowledge
of the industry and meetings with you during which you will provide
us certain information. The sources of information and bases of
the estimates and assumptions will be stated in the report. The
terms of this engagement are such that we have no obligation to
revise the report or the projected financial results to reflect
events or conditions which occur subsequent to the date of the
report.
Since the projections will be based on estimates and as-
sumptions which are inherently subject to uncertainty and variation
depending upon evolving events, we will not represent them as re-
sults that will actually be achieved.
Our report and financial projections will be intended sole-
ly for the information of the City of Miami/University of Miami,
James L. Knight International Center. Otherwise, neither the
report nor its contents may be referred to or quoted in any reg-
istration statement, prospectus, loan or other agreement or document
without our prior written authorization.
TIMING AND FEES '
Based on the scope of work outlined and our experience with
similar projects, we estimate that the fees for the study will range
83-326
s
Mr. C. Dean Hofineister -10- March 14, 1983
between $15,000 and $18#000 and that it will take approximately five
to six weeks to complete.
One week to ten days must be added to this time for typing,
reproduction and review. Travel and subsistence, typing and repro-
duction costs, and other out-of-pocket expenses are not included in
the above estimates but will be added to our final billing.
Our fees estimate is subject to upward revision if the en-
gagement entails more time than estimated, or if problems are encoun-
tered that are unforeseeable at the commencement of the engagement.
In this event, we will discuss the matter with you so that a mutual-
ly acceptable revision may be made. If the time spent on this en-
gagement is less than we have estimated, we will bill you for the
lesser amount.
In accordance with our firm's policy, a retainer in the
amount of $10,800 is payable upon acceptance of this proposal. The
balance of our fees is payable upon submission of the final report.
We appreciate the opportunity to present this proposal to _
you. Please contact us if there are any questions regarding its con-
tents. Our schedule permits us to begin work on this engagement
within ten working days of your authorization.
83-326
Mr. C. Dean Hofineister -11- March 14, 1983
If this proposal is satisfactory, please sign the enclosed
copy and return it with the retainer for $10,800 to us as authoriza-
tion to proceed with the engagement.
Very truly yours,
LAVENTHOL & HORWATH
i� " bt C
Irwin I. Glick
Senior Principal
IIG/ov
Encl.
41-11007
ACCEPTED BY:
DATE:
83-326
so
TC
FROM
CITY OF MIAMI. FLORIDA A.
�7
INTER -OFFICE MEMORANDIVM Y '^r� i Cr FICF
Howard V. Gary t A ' E March 24, 1983 FILE
City Manager
C. Dean Hofineister, E . Dir.
City of Miami/University of Miami
James L. Knight Intl. Center
E-E T City of Miami/University of Miam
James L. Knight Intl. Center
Feasibility Study - Update
REFERENCE
E'.CLCS'_RES
It is recommended that the proposed Resolution
be adopted authorizing the City Manager to appoint
the firm of Laventhol and Horwath on a professional
services basis to update the feasibility study
for the Miami Convention Center complex and prepare
and submit a schedule of recommended rates, rents,
and charaes for the Convention Center and Parking
Garage for FY 83/84.
Dated June 30, 1980 the firm of Laventhol and Horwath concluded a
feasibility study supporting the sale of the Convention Center
and Parking Garage Revenue Bonds. This original study cost $125,000.
In the Trust Indenture securing the Revenue Bonds the City has
covenanted to appoint annually an outside consultant to submit
recommended rates, rents, and charges for the Convention Center
and Parking Garage.
As the firm of Laventhol and Horwath performed the original
feasibility study and also prepared the schedule of rates, rents
and charges for FY 82/83 it seems reasonable to assume this firm
would be in the best position to expedite an update of that
feasibility study as well as recommend new rates, rents and
charges for FY 83/84.
In the attached proposal Laventhol and Horwath have offered to
perform the following services at a cost $15-$18,000 (plus expense):
1. Prepare recommended rates, rents, and charges for the
Convention Center and Parking Garage for FY 83/84 and
indicate the criteria on which the recommendations
are based.
Page 1 of 2
83--326
Howard V. Gary
Page 2 of 2
March 24, 1983
2. Project performance levels for the Convention Center
and Parking Garage for the next five years 1983-1987.
3. Project the financial operating results for 1983-1987
indicating the cash flow available for debt service.
It is recommended the City Manager be authorized to appoint the
firm of Laventhol and Horwath on a professional services basis
to perform an update of the Center's feasibility study, submit
recommended rates, rents, and charges for FY 83/84, and provide
operational projections for 1983-1987 for the City of Miami/
University of Miami James L. Knight International Center and
Parking Garage.
CDH:bf
cc: Cesar Odio
Law Department
83-32C