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HomeMy WebLinkAboutAgenda Item Summary Form111111 111111 0 R Date: 04/27/2023 AGENDA ITEM SUMMARY FORM File ID: #13923 Commission Meeting Date: 06/12/2023 Requesting Department: Department of Real Estate and Asset Management Sponsored By: District Impacted: District 2 Type: Resolution Subject: Bid Waiver - HRM Owner, LLC Lease Agreement Purpose of Item: For the authorization to negotiate and execute an amended and restated ground lease between the City of Miami ("City") and Tenant, and an expanded ground lease to include existing Hyatt Hotel and the James L. Knight Convention Center in anticipation of redevelopment or significant renovation to the facilities. Background of Item: The City entered into a long-term lease for the Property pursuant to a Lease and Agreement for Development dated September 13, 1979 (as amended, supplemented, and assigned, "Original Lease"). Pursuant to Resolution R-21-0442, on October 28, 2021, the City authorized the assignment of the Original Lease to HRM Owner, LLC. The Original Lease has a remaining term, including renewals, of approximately fifty (50) years and a requirement for additional renovations of the Property. The City wishes to authorize the City Manager to negotiate and execute an amended and restated lease agreement with Tenant for a term of ninety-nine (99) years. Budget Impact Analysis Item is Related to Revenue Item is NOT funded by Bonds Total Fiscal Impact: $ 2.5 million General Account No: 04002.221100.448000.0000.00000 Reviewed B Department of Real Estate and Asset Management Review Completed 04/27/2023 11:31 AM Office of Management and Budget Pedro Lacret Office of Management and Budget Marie Gouin City Manager's Office Larry M. Spring City Manager's Office Arthur Noriega V City Commission Todd B. Hannon Legislative Division Valentin J Alvarez City Commission Maricarmen Lopez Legislative Division Valentin J Alvarez OMNI Community Redevelopment Agency Andrew Frey Budget Analyst Review Budget Review Assistant City Manager City Manager Review Meeting Legislative Division Review Meeting Legislative Division Review Isiaa Jones Department Head Completed Completed Completed Completed Completed Completed Completed Completed ACA Review 05/02/2023 3:31 PM 05/02/2023 6:10 PM 05/03/2023 9:49 AM 05/03/2023 10:55 AM 05/11/2023 9:00 AM 05/15/2023 11:59 AM 05/25/2023 9:00 AM 06/07/2023 1:45 PM Completed Office of the City Attorney Maricarmen Lopez Approved Form and Correctness Skipped 06/12/2023 2:31 PM City Commission Maricarmen Lopez Meeting Completed 06/12/2023 2:00 PM City of Miami Legislation Resolution City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com File Number: 13923 Final Action Date:6/12/2023 A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), BY A FOUR -FIFTHS (4/STHS) AFFIRMATIVE VOTE, PURSUANT TO SECTION 29-B OF THE CHARTER OF THE CITY OF MIAMI, FLORIDA, AS AMENDED, WAIVING COMPETITIVE BIDDING AND AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND EXECUTE AN AMENDED AND RESTATED GROUND LEASE WITH HRM OWNER LLC, THE EXISTING TENANT ("TENANT"), TO PROVIDE FOR A NEW TERM NOT TO EXCEED NINETY-NINE (99) YEARS, TO INCLUDE THE EXISTING HYATT HOTEL AND ALSO THE JAMES L. KNIGHT CONVENTION CENTER PROPERTY LOCATED AT 298, 300, 330, & 400 SOUTHEAST 2ND AVENUE (COLLECTIVELY, "PROPERTY"), PROVIDING FOR THE REDEVELOPMENT OF THE PROPERTY TO INCLUDE AT LEAST A 615 KEY HOTEL, 188,000 SQUARE FEET OF CONVENTION/MEETING SPACE, 682 APARTMENTS, PARKING, ADDITIONAL PUBLIC OPEN SPACE, AND AN EXPANDED PUBLIC RIVERWALK, ALL AT NO COST TO THE CITY, FOR NO LESS THAN FAIR MARKET VALUE RENT WITH ADDITIONAL TERMS AND CONDITIONS FURTHER DEFINED IN THE GROUND LEASE, ATTACHED AND INCORPORATED AS "EXHIBIT A"; PROVIDING FOR AN ANNUAL RENT SCHEDULE, IN AN AMOUNT OF ONE MILLION DOLLARS ($1,000,000) FOR THE 1ST YEAR, ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($1,250,000) FOR THE 2ND YEAR, ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000) FOR THE 3RD YEAR, ONE MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($1,750,000) FOR THE 4TH YEAR, TWO MILLION DOLLARS ($2,000,000), FOR THE 5TH YEAR, ALL CONSTRUCTION RENT (CONSTRUCTION RENT") FOR THE PERIOD BEGINNING ON THE COMMENCEMENT DATE AND ENDING ON THE MINIMUM RENT COMMENCEMENT DATE ("CONSTRUCTION RENT PERIOD"), AFTER THE CONSTRUCTION RENT PERIOD, PAYMENT TO THE CITY AN AMOUNT EQUAL TO THE GREATER OF MINIMUM ANNUAL BASE RENT OF TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000.00) OR PARTICIPATION RENT EQUAL TO 2.5% OF GROSS REVENUES ("MINIMUM RENT") AS OF THE MINIMUM RENT COMMENCEMENT DATE, SUBJECT TO ANNUAL INCREASES AND ADJUSTMENTS THEREAFTER AS OUTLINED IN THE TERM SHEET; FURTHER PROVIDING THAT TENANT SHALL MAKE A TWENTY FIVE MILLION DOLLAR ($25,000,000.00) PAYMENT TO THE CITY FOR AFFORDABLE HOUSING; ALL AGREEMENTS WITH RESTRICTIONS, REVERSIONS, AND RETENTION BY THE CITY OF ALL OTHER EXISTING CITY RIGHTS;, AND WITH SUCH OTHER TERMS MORE PARTICULARLY SET FORTH IN THE GROUND LEASE, ALL IN FORMS ACCEPTABLE TO THE CITY ATTORNEY. WHEREAS, the City of Miami ("City") is the owner of riverfront real property located at 298 Southeast 2nd Avenue, 300 Southeast 2nd Avenue, 330 Southeast 2nd Avenue, and 400 Southeast 2nd Avenue, Miami Florida, 33131 with Tax Folio Identification Numbers 01-3137- 022-0010, 01-3137-022-0030, 01-3137-022-0031, and 01-3137-022-0020 (collectively, "Property"); and WHEREAS, the City entered into a long term lease for the Property pursuant to a Lease and Agreement for Development dated as of September 13, 1979 (as amended, supplemented, and assigned, "Original Lease"); and WHEREAS, on October 28, 2021, pursuant to Resolution No. R-21-0442, the City in anticipation of pursuing a redevelopment or significant renovation of the facilities, authorized the assignment of the Original Lease to HRM Owner, LLC ("Tenant"); and WHEREAS, the Original Lease has a remaining term, including renewals, of approximately fifty (50) years, and a requirement for additional renovations of the Property; and WHEREAS, the City wishes to authorize the City Manager to negotiate and execute an amended and restated lease agreement, in a form acceptable to the City Attorney, to grant Tenant a new lease for a term of ninety-nine (99) years, to include the adjacent James L. Knight Center and also requiring fair market value rent, the greater of minimum base rent in the amount of $2,500,000.00 or a participation rent of 2.5% of gross revenues, containing the terms indicated above, and with all other terms contained in the Ground Lease attached and incorporated as Exhibit "A," ("Lease"); and WHEREAS, the Tenant shall additionally make a one-time payment equal to twenty-five million dollars ($25,000,000.00) to the City for Affordable Housing; and WHEREAS, on November 8, 2022, the Charter amendment was approved by a majority of the voters in the referendum election, as acknowledged by Resolution No. R-23-0023; and WHEREAS, the City Manager is directed to negotiate and execute the Lease; and WHEREAS, the City Commission has determined that the Lease is in the City's best interest; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are adopted by reference and incorporated as if fully set forth in this Section. Section 2. By a 4/5ths affirmative vote of the Miami City Commission, the City Manager is authorized1 to negotiate and execute the Lease between the City and HRM Owner LLC, in a form acceptable to the City Attorney, whereby the City shall enter into an amended and restated Lease with HRM Owner LLC, to grant HRM Owner LLC a term not to exceed ninety-nine (99) years, to include the adjacent James L. Knight Center property, for fair market value rent, providing for an annual rent schedule, in an amount of one million dollars ($1,000,000) for the 1 st year, one million two hundred fifty thousand dollars ($1,250,000) for the 2nd year, one million five hundred thousand dollars ($1,500,000) for the 3rd year, one million seven hundred fifty thousand dollars ($1,750,000) for the 4th year, two million dollars ($2,000,000), for the 5th year, all construction rent (construction rent") for the period beginning on the commencement date and ending on the minimum rent commencement date ("construction rent period"), after the construction rent period, payment to the city an amount equal to the greater of minimum annual 1 The herein authorization is further subject to compliance with all legal requirements that may be imposed, including, but not limited to, those prescribed by applicable City Charter and City Code provisions. base rent of two million five hundred thousand dollars ($2,500,000.00) or participation rent equal to 2.5% of gross revenues ("minimum rent") as of the minimum rent commencement date, subject to annual increases and adjustments thereafter as outlined in the term sheet; further providing that tenant shall make a twenty-five million dollar ($25,000,000.00) payment to the city for affordable housing, , and also requiring that the tenant redevelop the property and include, at minimum, a 615-key hotel, 188,000 sf convention/meeting space, 682 apartments, parking, additional public open space, and an expanded Riverwalk, , with other terms and conditions as outlined in the Ground Lease attached as Exhibit A, at its sole expense and at no cost to the city. Section 3. Neither HRM Owner LLC, or any affiliates shall have any rights to the agreements contemplated herein unless and until the City Manager executes the subject agreement(s), with approval by the City Attorney as to legal form and correctness. Section 4. This Resolution shall become effective immediately upon its adoption and signature of the Mayor.2 APPROVED AS TO FORM AND CORRECTNESS: 2 If the Mayor does not sign this Resolution, it shall become effective at the end of ten (10) calendar days from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become effective immediately upon override of the veto by the City Commission.