HomeMy WebLinkAboutCC 1979-08-28 Discussion Item (4)OF MIAMI. FLOF/IDA
TO Joseph R. Grassie
City Manager
Conference/Convention Center
:13"1.1ECT:
FROM:
Vine:Ot E. .Giimmx.....4------1
2 .PErtriCNCES:
/e
%)/ .47 Lease and Agreement
/ /
/
21.41sOixtt4ti,41—a.liager 6./
...........74.7,7" rNeLOSUMetit
subsequently modified in September of 1978. On the basis of this I
The original signed agreement between the City and Miami Center
Associates, Ltd., was dated April 20, 1978. This agreement was
agreement, the Administration moved forward to achieve the necessary
financing. During this process with participation by the City's
Bond Counsel; Brown, Wood, Ivey, Mitchell & Petty; and the City's
Underwriters; Smith Barney, Harris Upham '& Co.; it became evident
that the original agreement had provisions which raised serious I.R.S.
considerations regarding tax exemptions and State constitutional
questions. Because of these two legal problems, it was necessary
that the provisions of the agreement be redrafted to eliminate any
inference that the City was joining in a partnership with a private
enterprise or that the City was lending any of its faith and credit
for the benefit of private enterprise.
All through this process, which has consumed thousands of man-hours
of effort, our goal has been to maintain the business provisions as
originally agreed upon, but to phrase these business terms in a
manner that would be acceptable to the courts during the revenue
bond validation process. The agreement that you have before you has,
in our opinion, and in the opinion of Bond Counsel and the Under- •
writers' Counsel, accomplished this.
As you are aware, the lease and agreement was in the final stages of
revision last night. Because of these last minute changes, it has
not been possible to submit a draft of our agreement to Laventhol &
Horwath for the determination of the revenues that the City will
receive and, correspondinglY, it has not been possible to deliver
information to our Underwriters, Smith Barney, Harris Upham & Co.,
so that a financial plan can be evolved. It is for this reason that
Section 3.2, Additional Rent, has been left vacant. This will be
iii
completed and filled in for Commisson ratifcaton early in September.
The basic provisions of the agreement are as follows.
1. A 45-year lease, renewable at the end of 45 years for an
additional 45-year term.
August 28# 1979 FILE:
Page 1 of 2
1 e
Joseph R. Grassie
4ngnat '29. 1979
2. An advance payment to the City for air rights value and rent
of the shell space constructed by the City and finished by the
Developer, as determined by the average of the appraisals made
by two independent appraisers hired by the City.
3. A graduated scale of Performance Rent based on gross revenue to
the hotel for room rents, food and beverages, and concessions.
(The determination of the dollar amount of this annual payment
is still in process.)
4. The requirement on the City that the City finance its portion
of the Project through revenue bonds and other sources to com-
plete not only the Conference/Convention Center but a parking
garage of at least 1,000 cars. A provision that should the
City receive a UDAG grant for the World Trade Center that the
parking garage could be expanded to approximately 1.500 spaces.
5. The requirement on the City that the Conference/Convention Center
and the Parking facility, whatever size is finally determined,
will be completed and ready for occupancy towards the end of