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HomeMy WebLinkAboutM-79-0566i CITY OF 'fl MI/UNIVERSITY OF MIAMI '';TAMES L. KNIGHT INTERNATIONAL CENTER MIAMI, FLORIDA STUDY AND FINANCIAL PRO JUNE 1979 or.o4/ 7 9- 3'6 1 LAVENTHOL & HORWATH CEPTIFIEDPUELsC AccOUNTANTS 20f ALHAMBRA CIRCLE CORAL GABLES, FL 33134 f3o51 442-2000 Mr. James J. Connolly Project Director City of Miami/University of Miami James L. Knight International Center Miami, Florida This draft report, entitled "Market Study and Financial Projections" pertains to those entities within the proposed City of Miami/University of Miami James L. Knight International Center from which the City of Miami would derive income from operations or rent on an ongoing basis and has been prepared in accordance with our proposal letter of March 27, 1979. The report is based upon estimates, assumptions and other information developed from our research of the market and information provided by you. The sources of information and bases of estimates, assumptions and projections are stated in appropriate sec- tions of the report. Because the amount and terms of a bond issue planned to finance a portion of the cost to develop the project have not yet been determined, our financial analysis does not include projections of bond debt service coverage or deficiency. The financial projections contained herein reflect proposed revisions in, the lease agreement between the City of Miami and Miami Center Associates provided by you as of May 29, 1979. We understand that these revisions have not yet been agreed to by both parties to the contract and that additional re- visions are contemplated. For this reason, our report is issued in draft form and is subject to revision by us. Any revision in the proposed lease terms upon which our financial projections are based could necessitate a significant change in the projections. However, you have indicated that while additional revisions are contemplated which could result in significant changes in the proportion of net income de- rived by the City from various sources, it is the intention of all parties that such revisions should not result in a material change in the total amount of net income as shown in our current draft projections. Notwithstanding this, it will be necessary for us to review the final, executed agreements to deter- mine whether revisions to our projections are necessary. CITY OF MIAMI /UNIVERSITY OF MIAMI JAMES L • leTIGHT INTERNATIONAL CENTER MIAMI , FLORIDA MARKET STUDY AND FINANCIAL PROJECTIONS TABLE OF CONTENTS BACKGROUND. • •• •• ••, PROJECT OVERVIEW •••6•• 00 0 •••••,• •• • • •• •••• DESCRIPTION OF FACILITIES . . . . . . • . . • . . . . . . OPERATING AGREEMENTS. OBJECTIVES MD SCOPE OF THIS STUDY. • •••••• MARKET AREA CHARACTERISTICS . POPULATION ECONOMIC BASE . . ECONOMIC TRENDS . 14CkL mks s TRANSIT. SITE EVALUATION SITE AND AREA DESCRIPTION ACCESSIBILITY Tco°uRiNcLsumsioNs . .• • . es ?,.‘sf,ostii;\••cvai 4 cvQ?, ACT ID ;• • . g, coOSVf‘.. ivv.\ . . - II/ 1-8 • • . 1 • III - 1 PAGE 3 6 11 AREA PROFILE AND DEVELOPMENTS . •••••••• III.. 3 • • • • III - 7 • • TRANSPORTATION DEVELOPMENTS MARKET ANALYSIS: CITY OF Yam' CIVIC AND CONVENTION CENTER . . . IV - 1-23 CONVENTION MARKET LOCAL THEATRE EVENTS SUMMARY OF PROJECTED UTILIZATION N'94,71",rIr • • . Iv- 14 IV •• 23 ‘x,rsvek.T., 1 1 1 1 1 1 LAVENTHOL & HORWATH CEPTliieb PUBLIC "ACCOUNTANTS 201 ALHAMBRA CIRCLE CORAL GABLES.FL 33134 (3051 '4 2-2000 Mr. James 'J., Connolly Project Director City of Miami/University of Miami.. James T.J. Knight International Center Miami, Florida This draft report, entitled "Market Study and Financial Projections" pertains to those entities within the proposed City of Miami/University of Miami James L. Knight International Center from which the City of Miami would derive income from operations or rent on an ongoing basis and has been prepared in accordance with our proposal letter of March 27, 1979. The report is based upon', estimates, assumptions and other information developed from our research of the market and information provided by you. The sources of information and bases of estimates, assumptions and projections are stated in appropriate sec- tions of the report. Because the amount and terms of a bond issue planned to finance a portion of the cost to develop the project have not yet been determined, our financial analysis does not include projections of bond debt service coverage or deficiency. The financial projections contained herein reflect proposed revisions in the lease agreement between the City of Miami and Miami Center Associates provided by you as of May 29, 1979. We understand that these revisions have not yet been agreed to by both parties to the contract and that additional re- visions are contemplated. For this reason, our report is issued in draft form and is subject to revision by us. Any revision in the proposed lease terms upon which our financial projections are based could necessitate a significant change in the projections. However, you have indicated that while additional revisions are contemplated which could result in significant changes in the proportion of net income de- rived by the City from various sources, it is the intention of all parties that such revisions should not result in a material change in the total amount of net income as shown in our current draft projections. Notwithstanding this, it will be necessary for us to review the final, executed agreements to deter- mine whether revisions to our projections are necessary. 0Mxn't�SP �..NT t47,'RbkS•'718#t�"1' :Ylf :?t^-,is;R• w+J6+.1 F!}FdNtlilk+.,et isny x..,�r..ei. try' ds-mV s; "h', kCM A-.,.,.a&aw.-r::vawx"r�.n,.t„+iSM:'av-�i4 ...:� �Y :J +?'s'fi5",.. r 1:•v'aY�i'G:]h tL'::?.r¢;4�,�'�'1,-_,,. We have not ascertained the legal and regulatory requirements applica- ble to this project, including zoning or other federal, state or local regula- tions, permits or licenses. Further, no effort has been made to determine the Possible effect on the project of Present or future legislation, including any environmental or ecological matters or interpretations thereof. This study did not include a determination of the potential impact of possible energy shortages. Because this report is in draft form and is subject to revision by us, it may not be referred to or quoted in any registration statement, prospectus, loan or other agreement or document. Such use of our final report will be per- mitted, subject to our receipt of a written opinion from your legal counsel as to the propriety of any such registration statement, prospectus or other docu- ment and our prior review and approval of proofs of all offering materials. _mommMOIWW-Wt_ ,i4710.1-'44ter • - • - - • • 0.40;fiki,V7„16...itaoihrte^r",-.,,,,,rrr;017,. • -••,'•• • ' 777:0.7Frm, Mr. James J. Connolly We have not ascertained the legal and regulatory requirements applica- ble to this project, including zoning or other federal, state or local regula- tions, permits or licenses. Further, no effort has been made to determine the possible effect on the project of present or future legislation, including any environmental or ecological matters or interpretations thereof. This study did not include a determination of the potential impact of possible energy shortages. Because this report is in draft form and is subject to revision by us, it may not be referred to or quoted in any registration statement, prospectus, loan or other agreement or document. Such use of our final report will be per- mitted, subject to our receiptof a written opinion from your legal counsel as to the propriety of any such registration statement, prospectus or other docu- ment and our priorreview and approval of proofs of all offering materials. CITY OF MIAMI/UNIVERSITY OF MIAMI JAMES L. KNIGHT INTERNATIONAL CENTER MIAMI, FLORIDA MARKET STUDY AND•. FINANCIAL PROJECTIONS PAGE BACKGROUND. . . . . . 1-12 PROJECT OVERVIEW. . I 1 DESCRIPTION OF FACILITIES::.. . . • . • . . • • • . I - 3 OPERATING AGREEMENTS . . . . . • •. • . . I 6 OBJECTIVES AND SCOPE OF THIS STUDY. • •�• I 11 MARKET AREA CHARACTERISTICS . . . . . . . II - 1-13 POPULATION • • !. • • .�. . • II 2 ECONOMIC BASE . . �ea��� . II - 3 ECONOMIC TRENDS • . 31.19�9,P_���,Ic�NN�i,—. SII - 5 LOCAL MASS TRANSIT. ` p '� t«.MF�N�:11 41t'cA . II 10 C l�. .C• TOURISM .S.Gn �:�1 pti=. w YV Lv�S�. II - 11 CONCLUSIONS F, iI 3 �1��•? P,, •,\ ' Sgta� . II - 13 :.. SITE EVALUATION i�`:� III - 1-8 SITE AND AREA DESCRIPTION . . . 1.t.tg4. . . • ▪ . T▪ . . . . III - 1 ACCESSIBILITI' .. III - 2 AREA PROFILE AND DEVELOPMENTS III,- 3 TRANSPORTATION DEVELOPMENTS III - 7 MARKET ANALYSIS: CITY OF muse CIVIC AND CONVENTION CENTER . CONVENTION MARKET LOCAL THEATRE EVENTS SUMMARY OF PROJECTED UTILIZATION TABLE OF CONTENTS MARKET ANALYSIS: HYATT REGENCY HOTEL COMPETITIVE SUPPLY (CONTINUED}; . .'..- . • . • .. • • -: • • • • • • • ▪ • • • • • • • -i• • •'. • - DEMAND ANALYSIS . PROJECTED AREA OCCUPANCY. PROJECTED OCCUPANCY: PROPOSED HOTEL. • • •• • - • • ' • . • '.. • - • • • - RETAIL MARKET ANALYSIS- • • • • • • • • • • • • • • • • TRENDS IN MLAMI'S CENTRAL BUSINESS DISTRICT • ADDITIONS TO THE RETAIL SUPPLY MARKET POTENTIAL FOR KNIGHT CET ACILI • • • - • PAGE 1-16 2 8 11 1 12 1 VI 1-6 VI 1 VI 3 VI 4 0 •• �� �da�R� • VII - 1-5 PARKING GARAGE • • • • (% • • • ;� 1979. N: VII - 1 •r`: F' O 1-5 10 • VIII �ti - CITY OF tradeCIZtiC�6�+iD (�AI�rEl�fi� VIII - 2 VIII 3 FINANCIAL ANALYSIS: REVENUE OPERATING EXPENSES .�t.• ‘;..- FINANCIAL ANALYSIS: PROPOSED HYATT REGENCY HOTEL • • ROOM DEPARTMENT FOOD AND BEVERAGE DEPARTMENT OTHER OPERATED DEPARTMENTS UNDISTRIBUTED OPERATING EXPENSES. • - FIXED CHARGES FINANCIAL ANALYSIS: PARKING GARAGE - • REVENUES OPERATING EXPENSES • FINANCIAL ANALYSIS: ENTERPRISE FUND. 1 1 1 1 •1 1 The City of Miami (the ity") has entered into separate agreements with the University of Miami (the "University") and Miami Center Associates, Ltd., a limited partnership, (the "Developer"), calling for the development of a civic center/convention/conference/hotel complex on a 5.5 acre site located along the Miami River at S.E. Second Avenue in Miami, Florida. The complex will be known as •the City of Miami/University of Miami James L. Knight Inter- national Center (the "Knight Center") and will contain elements operated indi- vidually by the City, the University and the Developer. The City will own and operate a civic and convention center consist- % ;;, - • "' Parking Garage City of Miami Civic and Convention Center �. Hyatt Regency Hotel JAMES L. KNIGHT INTERNATIONAL CENTER 'f21-110-11°. liu� tiis i'l Iseallsit-In-inslizesiw-iss.i�4�N,`"� iiiiiori-ir-1;—•, vaiiiilli14111111111°1111.24' Slain * kitaiiii jT: _ .:1\,? '\,�•1 :art 4�M University of Miami Conference Center MI I • • • a ■ ■ • cost of the • BACKGROUND ing of approximately 55,000 aqua facilities, and a 988-space park :a . IONI JUL 31 1g19 tdatel e f ttcQf,;p l.he� lira, 4� � aQ�d s r}!, li %i�N !s� i" "LL',r rT is suBJECT To fo i F fE: `�ii!� !)^'� ,�,6L: REVISION l'V/ ANI . 1 C'S I- 2 pport The University will lease from the city, approximately 20,000 square feet of space, net of corridors and support facilities, in which it will operate a con- ference center.' The Developer will lease from the City air rights of a portion of the and convention center and. certain` areas within the comprising center area comp" center itself in which; it will operate a 608=roomHyatt Regency Hotel (the "Hotel") and.,retail stores. The project is estimated to be approximately $81.9 million. The facilities to be owned by the City, excluding certain furniture, furnishings and equipment in the University's conference center, are estimated to cost approximately $49.9 million and will be constructed, furnished and equipped utilizing funds currently possessed by or committed to the City for such use and the proceeds of Lease Revenue Notes to be issued by the City for this purpose. The furniture, furnishings and equipment not provided by the City in the University's conference center will be provided by the University total at its own expense. Hotel, including all furniture, fixtures and equipment, is esti- mated- to cost approximately $32 million and will be financed through equity investment by the Developer and construction and permanent mortgage loans to the Developer from the Continental Illinois National Bank and Trust Company of Chicago and the Massachusetts Mutual Life Insurance Company, respectively. CITY OF MIANII Facilities Theatre/Auditorium' t Section 1 2 3 Meeting rooms A Total Section 1` 2 Total Section Total Total Total Total' LE I I0 NTER ADD .ORA cAso.• rot IGH • RNATI •�5 ��St�a /fir _�4✓ ,`Fl-. Cry •C.•5;Ei �� \. „� \7 S r •. J .r. V 1/.�,v s �\ ,t 1.Ac1tttin,',c t. Total lrevelis'`� Lobbies/office/support= Parking garage Retail stores N/A of applicable Level;,' Level 3 Level 3 Level 3 Level 3- Level 3 Levels 1,3,4 Separate , -building Garage walkway' Size (1) (Souare feet) 50.000 (approx.) 17,500 20,000 12,500 250 (1). Source: Ferendino Grafton Spillis Candela. _ . �pK � 1 MM� w .4iY: M•4 �A.'.,}n( 54 -� S{I'�.N _� Y' *' 850. 550, 850 966 483, 483 3, 8 15950 14,000 Capacity, 5.000 seats 1,750 2,000 1,250 ;25 seats 85 55 85 96 seats 48 48 48 seats 48 seats 48 seats 48 seats N/A 988 spaces N/A t . BACKGROUND DESCRIPTION OF FACILITIES posed Exhibit I (facing page I-2 project as designed by the firm o Coral Gables; Florida. Ferentiin The complex will consist of: pro- ton Spillis Candela of A four-story base building containing the meeting rooms, offices, storage and support facilities to be operated by the City and the University, and the meeting rooms, retail stores, food and beverage, storage and other sup- port facilities to be operated by the Hotel. A 19-story tower located atop the eastern portion of the base building containing the 608 hotel guest rooms. A 988-space parking garage to be located apart from, but connected to, the main building via an enclosed walkway. Although there will be separate and convention center and the comprising the outside entrances to the City's civic Hyatt Regency Hotel facilities, and those University's conference center, will be interconnected and not readily distinguishable as separate entities. City of Miami Civic and Convention Center and Parking Garage in Table The City will own and operate those facilities listed and described I-1. These consist primarily of a 5,000-seat theatre/auditorium, six small meeting rooms and the.988-space parking garage. The theatre/audi- torium will contain 4,000 fixed seats in a tiered configuration and approxi- mately 10,000 square feet of flat floor area in which various size stage facil- Facilities Auditorium Lecture room Classrooms A - Total Section TABLE I-2 UNIVERSITY OF MIAMI KNIGHT CONFERENCE CENTER JAMES L. KNIGHT .INTERNATIONAL CENTER Location Levels 3,4 Level 3 Size (1) (Square feet) Capay 4.480 ; 500 seats 1.677 150 Level .3 2— 0 Total Level Total Level 3 Total Level 3 Library Pre -function Offices/audiovisual/ support N/A ot. 'applicable' Level 3 Level 3 .Levels''3,; (1) Source: Ferendino Grafton Spillis � . s ,.. r y d' Y N W+`h'K l�l•t .%3. "w!{i�� I'MJ ' L � i MivL'1w'9.� - .�h }) rW-x y. ,025,`. ,025 ;;700 700 700 1.363 4.255 204 102 102 70 70 70 N/A N/A N/A •-ram.-.9...,, I 1 1 9 1 1 1 1 1 I. BACKGROUND ities and/or 1,000 additional seats can be set. Seating in the area would be elevated fixed seating., The theatre will be divisible flat floor in a tiered configuration to fit with that of the, v sable into three section's with seat- ing for 1,250, 1,750 and 2,000 persons with facilities permitting complex:. simultaneous respectively. It will be equipped translation. The parking garage would service all elements of the Knight Center University of Miami Knight Conference. Center The University will lease from the City those facilities listed and described in Table I-2. These facilities will be operated as the University of Miami Knight Conference Center and will be utilized for seminars, confer- ences and continuing education programs sponsored by the University. The center will be equipped with sophisticated audiovisual equipment, including closed cir- cuit television and facilities permitting simultaneous transl seat auditorium. in the 500- Facilities Lodging rams: - total Standard Suite Lobby/Front office Food and beverage outlets: Coffee shop Restaurant/lounge Lobby bar Meeting/Banquet rooms: Main ballroom - Total Section A B C D Pre -function - Total Section A B C Exhibit ;hall -`Total Section 'A Meetingroom Section A B - Total ' Meeting;room'B - Section A B Meeting room C - Section A 3' C Meeting room - Section A B Total Total. Total Promenade offices Banquet kitchen Second kitchen Employees' cafeteria Laundry Housekeeping Storage/support Recreational amenities swimming pool Retail stores N/A - Not applicable' 'HYATT JAMES L. KNIGHT N .9 532 76 1 1 1' I • EL U U �dStisl TIONAL CENTER ,UL p 9 GMtN� fit" �t�• �.NG Sugj c1 SO •l ��u�r��. � � �" �F•� �S POSSiBLE RE 1SR achy cation . -� Tower•ICVD1lA',,:. N/A f1NA� R�� 39�3 ea N/A each N/A Level 2 Level 2 :Level 2 Level 2 14,264 11,12i 1. Leval 1 3- 1 ,476 2,370 1 2,370 3,476 1 Level 1 1 1 ; 750 1 750 1,100 1 Level 1 4. 1: 1 1' Level 1 2, 0 1, 1,044 1 667: 1 640 ca. 1. Leval 1 3.360 1,680 1 1,680 1 Laval .1 $�+. 1 280 280 Level 1 247 1 285 1 1 Level •1 8,242 N/A Level 1 3,594 Level 1- 7,019 1" Level 2 4,018 1 Level 1 1,040 1 Level.1 ' 3,591640. 1 Level 1 3' 1 Level 1 12904 1 Level 1 Not.determined Level 1 26,000 total Not determined (1) Source:-Ferendino Grafton Spillis Candela Sias seats 212 seats IQ seats 1.170 seats 348 237 237 348 ZQ seats 110 75 75. 110 seats la seats 61 104 67 64 210. seats 168 168 §¢ seats 32 28 28: Li seats 25; .29 N/A N/A N/A N/A 75 seats N/A N/A N/A N/A N/A 1 i 1 1 1 1 1 1 I. BACKGROUND I- 5 1 (1� sl `da Jul 311%9_' �EM�N' cil t¢�e �4P'te,VAGAGEMEtal dc{sgpiPv010he Regency hotel.' tt The `608guest rooms will be contained in a 19-story tower. Standard room bays will be approximately 400 square feet in area and suites will contain various conflgtrations of two, three four and five standard room bays. The number of suites to be approximately 70. The top concept" service floor. It floor ;of been finalized but is expected to be Hotel will be operated as a "concierge will consist entirely of suites and will feature its own check -in and reception area and a concierge kitchen. The Hotel will contain three food and beverage operations. An infor- nal'facility serving breakfast, lunch and dinner will be operated with approxi- mately 250 seats and a specialty restaurant, featuring fresh seafood, steaks and South American dishes for dinner only will be operated with approximately 200 seats. This facility will also contain a seafood/appetizer bar and a lounge area featuring low-key entertainment. The third outlet will be a lobby bar/ restaurant featuring a selection of quiches and crepes in a garden setting. This facility will also be utilized for continental breakfast service when necessary. The 26,000 square feet of retail space will contain sundry shops intended to cater to hotel guests, and boutiques, apparel and other stores intended to cater to hotel guests and the general public. 1 1 1 1 1 1 1 1 I- 6 OPERATING AGREEMENTS ��� t0 1''s o� uSEO �3c,pa.E�',t �S S�fC��1S�N ' of pert DD 14 ;�+xt, frk�e�' 6°S°5�ts - en end the CityF��j$. % 't t - • • er which have bearin . BACKGROUND ' 9 3 01,01 i M �5 Following is a s summary on the utilization and summary has been prepared from a review of the original agreements and repre- sentations made by the Project Director concerning revisions to these agreements. financial proj ions presented in this report. The We have relied solely on representations made by the Proje the performance by all parties in matters agreements. City of Miami/University of Miami t Director concerning original. and, revised The University agrees to lease from the City those areas. and others, described in this report for which the University has made and will make periodic prepayments of rental to an escrow agent amounting to $2.5 millionin total. These funds will be deposited to the City upon completion of the Knight Center, as defined in the agreement, and will entitle the University to utilize the facilities covered by the agreement for a 30-year period at no additional rental charge. The University will have the option to renew the lease for two additional 30-year terms under conditions outlined in the agreement. 2. The City will provide and pay for security, custodial and maintenance services for the University's facilities but will be reimbursed for these expenses by the University in amounts to be agreed upon by both re I. BACKGROUND parties. If both parties c custodial and maintenance se the University will have the Note_ • The I.7 :recto if the lev g i iyy, °a M %1 LI ”rfl tOity vice tsie S ,crgs�ta F �Sti ' rs $v ght.ol�QOfde^� otE,$1v' Y- . WO' F. The financial projections presented in this report are based on the assumption that the City would be reimbursed in full for the cost of providing these services. University will pay utilities expenses for itsfacilities • The University will pay for personal property and:public,liability for its facilities and reimburse the City for the cost ofins,uring� real property Teased by the University. . The City will require the Developer to pay to the University an amount of 15 percent of hotel guest room sales or the equivalent of prevailing industry standards for hotel guest room sales generated from activities or conferences arranged by the University's conference staff 'City of Miami/Developer The Developer agrees to lease described in this rom the report, and other insurance the City the air rights and areas for a period of 45 years under terms set forth in this report, and others, with an option to renew an additional 45 years under terms set forth in the the :lease . for agreement. 11 1 1 1 1 1 1 I. BACKGROUND 2. The Developer agrees to cont for the construction of cer Davel0Per and for the purchas be contained in facilities lea the operation of the hotel. Of I-8 3 i 1979 illion to tr Used 1 Gt.-0°4 1.15 p operty 5o ditqj:let c.N04::\010- m Of rizeft41-ycsric24treelsdl ekiTptlig" or, s‘b r required for $5.3 million will be con - tributed to the City as construction of the project progresses. The remaining $400,000 will be contributed in equal installments of $40,000 payable annually beginning one year after the project is fully coup. plete and in operation subject to the following condition: The $40,000 annual Payment will be reduced by the amount of $1.53 per square foot for the average amount of the 26,000 square feet of retail space oper- ated by the Hotel which was vacant over the previous year. 3. The Developer will Pay rent to the City annually for the air rights and facilities leased by the Developer in the greatest amount of three alternatives: A. An amount equal to 20 percent of "Net Operating Profit", defined as total revenues from all operating departments, net rents from retail tenants and any other revenue generated from the Hotel, less the following deductions: (i) Operating expenses in accordance with those defined in A Uniform System of Accounts for Hotels, approved by The American Rote]. and Motel Association, excluding the incentive portion of management fees paid to Hyatt Hotels, Inc. (ii) Real property ad valorem and personal property taxes. (iii) Insurance premiums. (iv) Reserves for replacements in the amount of $27 per hotel guest room per month (1979 dollars) and increased an- nually for the effects of inflation. s I. BACKGROUND Replenishment and/ _ l E ! 1gr9 as = s n worJ cL apital . �dat°1 -1401 a (vi) An amount equal to 4� per hotel gueSP cMEN0 'O year for hotel debt service n_d,priFf4ty re-t ' IBAC N equity capital inves ors A`-' ,c 1'`Cr-' - \ "'��'✓- �-1 8 E aE�' 0 10 _�..• • . �,,k� JvOss vii) Payment of 1-1/2 perc nt b'e.possti 11otei••.ro• -s to the first mortgage ation interest." oldif as OVA: An amount based upon room sales net of commissions as follows: Annual room sales net of commissions (thousands) $ 0 to $ 8,500 8,500 to 9,000 9,000 to 9,500 9,500 to 10,000 10,000 to 10,500 10,500 to 11,000 11,500 to 11,500 11,500 to 12,000 12,500 to 13,000 13,000 to 13,500 13,500 to 14,000 or more` Percentage payable as reit -0-7. 2.0 2.3 2.6 2.9 3.2 ., 3.5 3.8 4.4 5.0 amount in accordance with the'fo1lowing schedule: 3 7 8 .. 9. 10 through expiration of Lease Term L t; {G"."',.tY-�ii, Minimum performance rent $150,000.00 150,000.00 175,000.00 175,000.00 200,000.00 200,000.00 225,000.00 225,000.00 250,000.00 250,000.00 F 1 1 1 1 1 I. BACKGROUND 4. The Developer, will provide secu for those facilities leased b 5. The Developer will pay for utilit Vs01 the46 s OSES% E ; SVBJEC1 insurance ial and mainzens i • 04 J111.3 AC5r-l'AETsva - t'oss‘sLt. s.\i‘s‘01.4 coverages for those facilities leased by the Developer. 6. The City will provide and pay'for those items listed in 4. and 5. above for its facilities. • e Developer will establish a reserve fund ,for- replacement of furniture, fixtures and equipment in the Developer's' facilities in the amount of $27 per guest room per loath- `(1979 dollars), to be increased for the effects of inflation. 8. The Developer will contribute to the City anamount not to exceed $100,000 annually to be used for the promotion of cultural, civic or other events , at the. Knight -Center. The City will engage a professional management company to manage its facil- ities. 10. The Developer will pay to the University an amount of 15 percent of hotel guest rooms sales or the equivalent of prevailing industry standards for hotel guest room sales generated from activities or conferences arranged by the University's conference staff. r 1 1 1 1 .1 1. BACKGROUND This summary pertains jections contained in this report ments , including provisions which a circumstances other than those refle herain. 11 1 pro- er ions contained ,...,:,:„,,..::...:,,,...;:,:..,„.,....,,.......:AND..•_.:::::,..,6,..,.-6i„-:-E:,i,..',-.,:,.-,Tit,:„...t....,S,,..-:,:771DY--'•' ..,..........,..,,...:,..,,,±..-...,:•••• '-•••---','-ehe OBJECTIVES was. en-liefFI:''':•••-•-'':-.'.-1:71:,.-:,•::::',',,,:.i,-.:-.,-,:,,s'-,:,,:...:-:',.:.,:t,.:: • . the ,c, /to th' .T.''..'.:...,:, income • derived:„,.:,,,.,..E....,•,...,,.,,,,,E;......,.....„:..t..._a_ ct ket •• . , - , • :.:,.....-: . -, '1-.- --'----7,:-:::-.::•.-.:::::f...':-....:':: ..,...-,..-:...-....--.1.,•ne;',„tr"77,..:,..:,:::::::-"' ,.,i..re...,to::,gP Y -',.:ii,1.,-Iiit.::;,•st,.:,.. the g' .'te;''''-:66il441:::..*::'":-.-:-..':'-:•:...:11.,'''.::--,..'''he)-ti-.':: cly.,:,-,?':'f...F....,:- ty . .,, ' . : .. ........ ..-....:-:.:•.,,ii.,..pro,..•..,-:::.,-.. -- -• , .•. --... i. --.' ....' - ."-... •-:',Litv0!!°...--:.-,:.'--:.--'• '-'-';''''''.'_:•....-. r'' ::::::";.--.:'-''' iI.OFI!''1"hie: .1: ..-.,::1,7.,-`, !;:. ,i.i...,.,;(1 :.::'tti.,10....'7777.7...:.7.1,.„,.,1„.-:-fie . .... .:. ::...-:'.:..E.-'::,.",':-•-•-,,::'-'iiiid:•':'OrP?..---::,:--::,...-:-r-,'.'':''...:'..,.iiiiii.i=1.-.F.'....,-:.-,.':', . .:'---,,ii:,:::0,...,,,,,;:,:--,.,-.,,,:,.:,',,,,-,-.,' for ,--ilr,'-::Ce,7-:-:''•;:•-''-•:•'.::•-,-Y:-:',.::.:':..,::.:1'.-._:'-'---'-iirer,i'1?P!..:•:...''•:-::-,:-...,"'•--:...':',.:':'::-:'...;:ii';,::6f:0!!:':'?::,.;.:...,...-".i.;7•.::::::::•,:-:'•I'lli::::::::'''...;'-'''''''' •••....,.:::...-::-.-'.,..''.'„yearE.:-,-:,,.,,,-._ (h'':,..E--•,..'-..-1',.-.1.'.:':1--..-::.,.-:::-....:::::.:'„..,'.:;••••••:,.-,:-,-s;•,i;I:-],'E--thel:9!..:-,:„;.:•:•:-.':.....,; ,...-...,:-.-.,i,':-•-,EE.,',:.--,E.--:.„•ii.•,.:.tort4.,... :::.:'--E.•.:::----,:',....--..:.--,-,.._,- ,, .... ,. ‘,..... E . . fi..;.F...::..77:.-,.,.-..,....,,,i,..i..:...sued...,!.cP.: ,,.. Revenue,..,..,, . b develop.- 7.-..i. Notes -,:-....:'•z-...-:•,..::finance,.,,...,..--,-.. Leafe''''' '.. -::-:.:..'". .::-:-; iii.:41...." project. -. : - '-, 1:„ : ' . ' c. - ' ' ' ' - - - . • ' 1 . 1 ' : ' ' , '..,E. .E,...,..„:,.,•,,,::::::;,e:-.:::..o -- ' • ' ' - '': ' ' . , ,.':. : :,....:.::::,-E,:-.:.:.,:::',•:',..,4iiii(.•,.,..„..,:.„,„:„,,...,.:,,..,,,•„„.,.-,,,:.--•...... ":"i.--:::".":"--1.',.:•:-.1,''..'.• -.-i-1:.--..-- :'-'..-,' ' . .. . . . , , , ,., ,,,,...::.....:•,....:.:.,-;.--.......::4'.-•,..,::',-....i:- .-..-.',•:ihe,.,..:sF°Y.-.,-- our • - - ' ' ' . . . .,.:..,,.. '''' '''' ' •••..-6biec,..t.:7•H---..--....-'.--•••-:,,,.'''''''''-•-•-d . the ' - • • • - •:•-•1i...:,..-.7::•::::•'-'' ,::th, e......,P:':,'„',,,':':-:.'..'.-,':.._.....,.,' ..,. •,... .. . i6'116iiihg:-.:-- . ': ---,'-'. -:•'''...::'-'-' 7- '1' ''...:".:'-'-'1:::-----. 1. A review of the Miami area economy to assess pertinent characteristics trends which have an overall impact on the proposed project. •• ." • ,-.• • • . . 2. • project site to:- deter:nine its suitability for the • , • proposed developmetit. „. . .. • -• •-• ,• • ,.„ .„. • . •,- ,,,-• •-.,. .. • -•-,:,.- • • • E E E..., analysis::,,•of,:'•the'•:.:convention lodging, • parking , • ••- • and other arkets fro • ••,..• which Center would and derive patronage. 117 I. BACKGROUND Geo, 1 i..;;...:0'c‘4t,0 4. Projection of annual utilizat'o Knight Ce c tee tpist-Z'"' S the University of Miami Knig t r,Astat if!? Years of tinn. Analysis of the financial per theatres and hotels similar to those to be contained in the Knight Center. 12 rmance of civic and convention centers, 6. Projection of net income derived by the City for the first ten years of the Center's operation as f°11°/481 11PWRIPPRIMPWArgarmaanemnigri, A. Net operating income or loss of the City of Miami Civic and Convention Center. B. Rent paid by the Hotel. C. Net operating income of the parking garage, including income derived from the rental of retail space in the garage lobby and walkway. Tr. II,. MARKET AREA CHARACTERISTICS In this chapter we present acteristics of the Greater Miami area in terms of the impact such factors might 1 s have on the market potential for the proposed development. Tourism, construction and trade have been the mainstays in the area's and demographic char- 1 economy and should continue to be so with a growing emphasis on the trade sector. Niami is growing rapidly as a center for international trade and finance, par- ticularly with Latin America. Trade with Latin America has increased dramatically in recent years 1 as a result of several factors, including the city's large and well qualified Spanish-speaking labor force, excellent air access and port facilities. This worm* vne n.1.4mrs,rtsi . r It' 1 1 .1 • I 1 II, MARKET AREA CHARACTERISTICS has stimulated the development o the city which, opening of the area's economy • in turn, have attra Miami Free Trade Zone as Miami is expected t visitors between Europe and Latin "erica. The h6am in Latin American trade has been accompanied by a major crease' in tourism from Central and South Aierica. business travelers frequently bring wives and children along with them and have become a major 'tors represent a prime n 10 r channeling goods 2 the force io Miami's lodging and retail markets. Latin segment of the area's shopping market. The develoPmeot of this international trade and tour the area's economic base and reduced the sharp seasonal fluctuation in the area's lodging market to some extent. In the long term, continued growth is expected to occur. in - POPULATION Mach of the economic growth in Dade County during the past ten years has been the result of a high population growth rate. Approximately of this growth occurred as a result of in-aigration from both the northeastern United States and Latin America. The following table compares population in- creases in Dade County with growth in the United States. is has broadened "..,11.011yrareeresavora.aortswensmaw... .n.••••74.m. 75 percent m. for Ns w II. MARKET AREA CHARACTERISTICS POPULATION GROWTH FOR DARE' COUNTY 1940 Pei Dade County 1940 268,000 1950 496,000 85.1% 1960 935,000 88.5 1970 1,268,000 35.6 1977 1,501,000 18.4 Average annual percentage change from 1970-77 Source: 2.5% Mel `3 t aV ,a�` OS cent O T t,Ited ' Syatda increase c,1.$1,6 =,100 0,697,000 179,326,000 203,235,000 218,218,000 14.4% 19.0. 13.3 7.4 Census of Population, U.S. Bureau of the Census and Bureau of Economic and Business Research, University of. Florida. Current projections for 1980 indicate Dade have substantial increases in its population base dueto new employment oppor- tunities resulting from domestic and international businesses expanding and locating in the metropolitan area. ECONOMIC BASE The importance tribution of personal income County will continue to to the local economy is evident in the die- byr,emOloylent category for the Miami Standard Metropolitan Statistical Area (SMSA) which reflects the dominance of services, transportation as income generators: li 1 1 1 II. MARKET AREA CHARACTERISTICS DISTRIBUTION OF PERSONAL BY EMPLOYMENT CATE 197 6 EMr 1 o vment category Manufacturing Mining Contract construction Wholesale trade Retail trade Finance and real estate Transportation, communication and public utilities Services To er 383,088 7 02,363 962,980 537,957 1,115,226 1,833,289 Other private industry 25 17 0 Total private nonfarm $ 6,477,7 27 ======== Source: Florida Statistical Abstract 1978. I 4 ion 13.8% .4 5 .9 8.3 14.9 17.2 28.3 . . 100.07. • The above table indicates that services account for aPProxislatelY 28 percent of all income received by Miami area residents. Transportation, communication and public utilities is the second largest income -producing category. The recent expansion of Miami International Airport, increased air traffic and the employment growth generated by Eastern and National Airlines which both have their corporate offices in Miami has pro- vided much of the stimulus for the growth in this sector. ,1-1^1) ne• sr," 111111111111111111111111111 II. MARKET AREA CHARACTERISTICS Retail trade ranks next as an income -producing category and• is expected to continue growing rapidly in the near future. Heavy purchasing bLatin visitors in the area is an important factor in this growth. The Floriday lorida Department of g^-mmerce estimates that Latin visi mately $65 a day on consumer goods. • • . • - -• • • 1974,76reCeSSion.:and'a broadening o , • •• . • .• , ••' • • ••;..Retiiil,-Seles.- • _ The follolving table su3szaarizes per capita retail sales in recent years: Year 1973 1974 1975 1976 1977 PER CAPITA RETAIL SALES FOR MIAMI SMSA AND THE UNITED STATES 1973-1977 Miami SMSA Per capita Percent $3,016 3,576 3,402 3,721 4,137 Average annual percentage chance 1973-1977 change 18.6% ( 4.9 ) 9.4 11.1 43.5% United States Per capita Percent change $2,437 2,630 2,781 3,116 3,325 Source: Sales Management Magazine "Survey of Buying Power." 7 .9% 5.7 12.0 6.7 8. r/. =MINIM - _ _ EFFECTIVE BUYING INCOME DADE COUNTY STATE OF FLORIDA AND THE UNITED Dade County: Total ($000) Median household Growth per household Percentage increase 1974-1977 State of Florida: Total ($000) Median household Growth per household Percentage increase 1974-1977 United States: Total ($000) Median household Growth per household'. Percentage increase 1974-1977 Sources Sales Management Magazine 1973 - 1977 1974 7,227,203;; 11,437 35,812,339 9,889 978,025,805 11,890 Survey ATE 1975 tr,b1317& 0 d 'ri Ar ly • 8,100,923 $ 8, 12,087 5.77 40,394,934 710 320 4.477, 1,073,292,857 12,824: 7.97, of Buying';: Power."' 1 8. s S c• di 78,144 95�fi At. 14�;1/� 357 r • SS <S4C • iB�F SG Fz,' " 9 .y fp sib ti 44,177,944. 11,086 7.4% 1,176,239,7.78 13,781 7.5 . 49,229,036 12,106 9.2% 22.47. 1,303,586705' 15,016 9.0%: 2637, 11 1114111!11EMI 1I I II II IIIIIIIIIIIII .11. 11-6 II. MARKET AREA CHARACTERISTICS The relatively high volume of per capita retail sales in the Miami • -11 SMSA is partially due to the number of tourist and convention visitors attract- ed to the city. The decline in sales in 1975 and the greater. rate of increase in 1977 vis-a-vi.s the United States are closely related to fluctuations in 111,1 "1 • II 1 , .. : .1 • tourist travel to the area. Effective Buying Income Median household income in Dside County is slightly 1 -r than the nation as a whole hut has increased at greater rates cantly higher than the State In total and h rates. (See table on facing page Office Space The following table p occupied in the Miami area since construction took place in the earl with the business cutbacks vacancy rates during the period 1973-76. However, absorption has occurred rapidly over the last two years, bringing the city-wide vacancy rate down to 7.2 percent in 1978. t is signifi- at greater pace available and seen that substantial office This increase in supply, coupled brought on by the national recession, resulted in high WV • II. MARKET AREA, CHARACTERISTICS 1971 1972 1973 1974 1975 1976 1977 1978 Source:Bunter HISTORICAL SUMMARY OF OFFICE SPACE DADE COUNTY 1971-1978 Square feet Available 3,900,232 4,984,839 8,260,780 9,801,947 10,523,532 11,002,567 11,737,829 11,536,356 Moss and Company. The recovery of the ar total employment and reduction in ployment rate has been reduced by mo Year, 1974 1975_. 197,6 1977 1978 Source: 3,657,940 4,534,025 6,717,147 7,787,510 8,420,528 8,826,971 10,102,882 10,701,408 6.2 % 9.1 18.7. 20.6 20.0 18.8 11.7 7. is refl V � v es e ti 5 aol un mplo ne4itaIecs i apit ed b`y.-mb�;t. , t�► ��; ei44 e thfa04.4 EMPLOYMENT STATISTICS DADE COUNTY, 1974-1978 Civilian labor Total Total force employment unemployment ' 649,700 599,600 50,100 673,200 585,700 87,500 672,600 605,600 67,000 681,700 621,100 60,600 688,000 640,000 48,000, following jobs and the unem- cent since 1975. Florida Department of Commerce. Florida State Employment Service. Unemployment rate International Number 3,383,514 3,491,791 3,879,899 4,126,179 4,247,945 4,194,188 Percentage _ chau e Total Percentage N___ change 10,660,815 11,176,739 12,266,378 12,722,239 12,443,885 12,068,118 4.8% 9.7 3.7 ( 2.2 ) ( 3.0 ) II. MARKET AREA CHARACTERISTICS Air Transportation MiaQii International Ai International in international pa hub of, airservice between North an and is served by 22 domestic and 31 scheduled cargo -only carriers and nume More applications new carriers seeking international routes or existing carriers seeking; ad- ditional routes. Many of these are for transatlantic or transpacific routes, assenger carriers, 16 us non-scheduled cargo charter lines. than 25 are pending before the Civil Aeronautics Board by markets which are not now well -served. Expanded service and promotional fares had a dramatic impact in 1978, when total passenger traffic increased by more than 20 percent over 1977. This followed two years o activity: 1970 1971 1972 1973 1974 1975 significant growth in both domestic and international M AMI INTERNATIONAL AIRPORT PASSENGER TRAFFIC (ENPLANED AND DEPLANED) Domestic Percentage ' Number change 7,277,301 7,684,948 8,386,479 8,596,060 8,195,940 7,873,930 5.6% 9.1 2.5 ( 4.7 ) ( 3.9 ) Source: Miami Port Authority. ;I 10, ,1 1 1 1 II. MARKET AREA CHARACTERISTICS n response underway or planned: .. or expansion programs -are. A $55 million dollar terminal expansion is under construction. It will contain a 200,000 square foot satellite terminal for international flights and a 125,000 square foot U.S. Customs and In -mi- gration Service facility and will be linked to the main terminal by an automatic fixed -guideway shuttle system. Completion is expected in December 1979. A $20 million expansion of the main east -west runway is planned for completion in July 1980. This is planned to reduce noise in near by residential areas and to facilitate jumbo -jet operations which have increased significantly with international charter flights. Projections of future air passenger traffic through 1985, prepared by an independent consulting firm growth in international traffic, ed to be greater than domestic traffic: also reflect steady increases. Tte of is indicated by the folio _ - N . rr•...'.[. „ ...i�^i� �s'-dJ��� � .� w+v,Y-� r'�t�'.�+Y 1; 'yd: y.� 5 ' 1e,.;t'ri r.4t x•.'.^,rit.'v;. xpect- fel II. MARKET AREA CHARACTERISTICS MIAMI I Damestit Percen Year Number chineOKillions) II-10 c4.. ...‘61ftst op. piG*-Ott41 S II r ti4; - 53 q 10 , -Et•Itt41 ' 1979 10.9 9.0% 6.6 10.7% 17 .5 11.6 6.4 7 .3 9.7 18.9 7.9 8.8 20.2 1982 1.3.3. 6.5 8.6 8.1 21.7 1983 13.8 5.3 9.2 7.5 23. 0 1984 1.4.5 5.1 9.9 7.0 24.4 1985 1.5 .2 4.8 10.5 6.5 25.7 1980 1981 12.3 6.0 Source: Howard Needles, Tammen and BarSendoff, Consulting Engineers. LOCAL MASS TRANSIT Metropolitan Dade County Rapid Transit S stem (Millions) One of the most important developments affecting Dade County in general and downtown Miami in particular is the recent start of construction of a rail rapid transit system. Construction has .begun on the development of a 21-mile, elevated rail system to extend from Kendall Drive, in Southwest Miami, to Hialeah, north of Miami International Airport. The system will pass through the western portion of the Central Business District and have 21 station loca- DADE NOR DADELAN SOUTH .e4_ r.a..-. OPA-LOCKA AIR �.° PORT PROPOSED ROUTE AND STATION LOCATIONS METROPOLITAN DADE COUNTY RAPID TRANSIT SYSTEM NTER- TIONA IRPOR OPA-LOCKA AIR- �.°� POR PROPOSED ROUTE AND STATION LOCATIONS METROPOLITAN DADE COUNTY RAPID TRANSIT SYSTET' 1 7 1 1 II. MARKET AREA CHARACTERISTICS tions as illustrated on the fac n Completion of the $867 Downtown People -Mover System 11 :e. O11114 sl 1VS %dam l- . system .is`P ,OtIi S0 Efforts are also underway to develop a coMplementary transit system within the downtown area. The first phase of the system would consist of a two -track loop around the Central Business District. elude spurs extending approximately ten blocks north and south of the loop Later' ,phases would in - o Northeast 15th Street and Southwest 15th Road, respectively. which would account for approximately 80 percent of the system' financing, have not been obtained but it is generally believed that the project will be funded. Planners are currently projecting completion Federal funds s of the system in 1984. TOURISM More than 32 million travelers visited the State in 1978 according to the 1978 Florida Tourist Study, conducted and published by the Florida Department of Commerce. This visitation represented an increase of almost 11 percent over 1977. Visitation to Dade County has also shown major growth, uw�wPI UInII�Im FLORIDA: DADE CO Year", 1974 1975 1976 1977 8 76 1977 1978 VISITORS TO DADE COUNTY AND THE STATE OF FLORIDA Air Auto arrivals -arrivals (000) (000) 6,750 17,250 7,362 19,346 8,027 20,900 8,513 20,662 10,309 22,060 Total arrivals (000) 24,000 26,708 28,927 29,:175 32,369 Average annual percentage change Air Auto Total. arrivals arrivals arrivals (000) (000) (000) 1,116.6 1 290.32,406.9 2,838.6 1, 284 7 4,123.3. 71.37.: 2,971.9 1,277.0! 4,248_9 3.1 ..9 10.9 ource: Florida 'Department of Coimnerce, annual. tourist studies. Annual - percentage change 1 IIt MARKET AREA CHARACTERISTICS espe c ia ll y during 1977 , with a reported 71 percent,increase over 1976. This substantial increase was due primarily to a significant reduction in an improving national economy and increased international tourism In 1978 there were over four million. visitors to Dade C• $1.5 billion. The table on the facing page for both Dade County and the Sta Mode of Travel rl 1978, approximately air with the remaining 68 percent ar County visitation was segmented in th- opposite proportions, with 70 percent visitation by air and 30 percent air fares, the County. over ends Seasonality Trend y by automobile. Dade eg OW° -14.1 t.k11;5S !!!!ved by NCIO4 s pertest4.„..A Or-O"' t7t.• ivino4e1 by automobile. There is some seasonal fluctuation in travel patterns for both the State and Dade County as shown on the table facing page II-13. However, the severe historic fluctuations in visitation have been leveled considerably. On a statewide basis, Walt Disney World has had the major impact on smoothing seasonal fluctuations since its busiest season is the summer quarter. Within Dade County, increased international tourism especially from Latin America has been an important factor in leveling off previously severe seasonal fluctuations. r.. • Quarter .• First , , 4 econd , •-• .;... • Third "--• Fourth Total irW QUARTERLY DISTRIBUTION or VISITORS TO DADE COUNTY AND THE STATE OF FLORIDA. 1978 4.. Dade County Florida Number of Percentage Number of Percentage visitors* distribution .visitors* distribution 1,224,700 29% 9,378,000 29% 902,600 22 7,728,000 24 995 100 24 7,792,000 24 1 042 200 25 7 471 000 23 i a 4,164,600 100% 32 369,000 100% 1===== =Nom * Includes those arriving by air an Source: Florida Department of Florida Tourist Study. 4 • ',,,V,4.4*.^,041/24-.',1A404'444-V4,'Y'4414, .,0,g,4.t • 0 II. MARKET AREA CHARACTERISTICS CONCLUSIONS .ialligt(gscal-61;,0 7.1 Gcmel 1 diversify. International trade andrcitouirtisttiC t1iir:::;46‘ens.C11:6jeoglr LIfaaictcrECs Miami area economy has recovered 'be.7eXIV;491141 the :rowso and After suffering substan itt this recovery and offer substantial opportunities for future growth. Although tourism will continue to be a mainstay in the local economy, developments in the trade and financi.al sectors are likely to reduce the area's dependence on tourist inflows. Growth trends in population, income, employment, office space occu- pancy and tourism all support projections of economic expansion, as do specific developments, including the establishment of the Miami Free Trade Zone, increased air ,service through Miami International Airport and the development of a" rapid transit system. These conditions reflect a positive economic environment in general and provide specific support for the proposed project in that they reflect • likely increases in the demand for meeting, lodging,entertainment and retail. •facil.ities i.n the Miami area. I 700 , 1 101M10.1.0 GREATER • c? menu et) • v. wpm (104 MEV, S.W. 40 S.W. 14 S.W. 71 0. N. 1111.4WiL 01. S w 112 EWAN oe TO KV WILT vsit=4,,r4'42': • 7404 001 '.0. ..M. 4o \ 41 .440r 8w26 ____--,<•hN,, 4 r. 11071411111441111 ROW 4B7To rot 1.AUOIRCIALL GAMMA DIM 1SS St NORTH MIAMI BEACH • ti I IV St. S 123 AGE N.itt. 177 1411WIT 11111 OR MA Imo (NM pzz E o" r MIA BE ST AI St. 1 71a St 6 S 31. IN01TO 1 • NW 1 imes M i r SITE AND AREA DESCRIPTION ■ The site for the James L. Knight International Center (see map on the facing page), is located along the Miami River, bounded to the east by S.E. 2nd Avenue, to the west by S.E. 1st Avenue and to the north by the 1-95 feeder ramp. The site encompasses approximately 5.5 acres of vacant land within the heart of the Central Business District (CBD). The entire site area is owned by the City of Miami. Currently, developments directly adjacent to the site include the Dupont Plaza Hotel to the east, the Bauder Fashion College to the west, the Miami River to the south and the Howard Johnson's Plaza Motor Lodge to the north. dir`arw..v. I• 1 EN i III. SITE EVALUATION Surrounding land uses are c however, future projects pro more with m*a 0 advantageous environment. The site provides the excellent access to III- 2 e nd tive hotd4►s'iev= opment; w thi CBD wi t�l► �E1�;gic tly ,P�v c� � FJE `• FN S S � j 5�0 f*5 OF J�,E� PVASU ���.(� �6�E RE V'��r'� r°pee., Knight International Center all majo ets and strong competitive advantages in penetrating the convention/group business and commercial lodging segments. The proximity of the CBD and Brickell Avenue offices, most within walking dis- tance, are major competitive strengths of the site. In addition, the proximity of several hotels will provide the potential to generate substantial convention and group business for the Center. two The location of the Flagler Street shopping district, approximately blocks north of the proposed facility provides a viable opportunity for the complex to capture Latin American ACCESSIBILITY tourism demand. Access to the site (see map on page facing III-1) is excellent for both north -south and east -west travel. The most direct access is provided by the S.E. Second Avenue exit off Interstate 95 (I-95), the major north -south route in the site area. East -west access is provided by State Road 836 (S.R. 836), the most direct route to Miami International.Airport, as it intersects with I-95 approxi- Secondary access is provided by Brickell Ave- r• • 1 r 1 III. SITE EVALUATION Approximate driving times f areas of Miami Miami International Airport Fort Lauderdale/Hollywood International Airpor Miami CBD Cora Unive Port o Miami 0 AREA PROFILE AND D 10 45 1 10 5 Downtown Miami is an office center for financial and professional firms and government agencies and a major shopping district. The Port of Miami, the nation's largest cruise port, is located on Dodge Island five minutes from the CBD core. Total employment in this sector is just over 100,000. The CBD core contains 3.5 million square feet of office space. Class A space is almost fully occupied and total occupancy stood at 93.6 percent in December 1978. This is up from 84.4 percent a year ago. The presence of the following financial institutions, the Port and both county and federal courthouses is the key to office demand in the down- town core: v. Ow- 1 \o�s� Southea o ng5�o . ration - Florida' NP �ti�w NC. �vO S`ON CE ,cij 4;`e�erafl� ings and Loan Association ,V , , n American Bancshares, Inc. - Florida s twelfth largest financial firm. Southeast Bank of Miami - Florida' Twelve foreign banks have commenced operation in Miami since enabling legislation became effective in 1978.' core or the Brickell Avenue area. -Other major developments in the of these are located in the CBD Miami -Dade Community College - New World Center Campus - Opened in 1973 at a cost of $10 million; contains classrooms, office and support facilities; present enrollment - 9,500. Gunman Cultural Center - 1,883-seat theater for the performing arts, located at East Flagler Street and Second Avenue. Miami Marina - 208 berths; 30-boat charter fleet; full support facilities including two waterfront restaurants. Brickell Avenue links the CBD with Key Biscayne and Coconut Grove and has been the fastest growing office district in the city since 1970. Office space here totals 1.3 million square feet and is 97.2 percent occupied. Lease rates are the highest in the city, ranging up to $14.50 per square foot. Again, major tenants are financial and professional firms. :.'-'`••• • .igrnr , -1147---•\ ;.;, 0, 0 ° N u ''' •• '703 .--, r---- , , , , • .,..„-_i -'-'1'wear',1,t„I.,imit,s, 47.1, i..„4.,-. , ii . ilm 4 L.111A.. 'L..] LatiludE a 0 • 1 i.17--a-:_-: IPE:Ti ,... ...., i.„,..pc,... a CI LItr 777 i L__::, c 1 tri-lqp :ja tl,i___.• p-m . \ .,.,•\(-,--,-.-at.77-7--71. El] , - ni mis 11,- • 4.! \ ,!1 ITIZE6 JLII Late& )74 W 111 ' 02101 Acam , ; A ‘\ .::::. \-7,77e)\‘ C'''',..7 7.-- 1 -*Ali2liRE: . ',":7 -----. I A :',C - Vs&.;`: ..-,,, N . ,Nt:nowir,ft_t n 1,,--cci--1-3: 9 aimmoq ,_, . , \_> ‹...,:,.,-,:: ...,..)x..!N; ,r--...... •,-, >,A • •••.. -•^, ,4^ ,V•il,•fr• r 1 1 1 1 1 1 1 1 1 1 1 III. SITE EVALUATION The southern e waterfront condominiums. The area north of t cottiplex. This project was hotel and 900,000 square feet of arP21 ii.4.:tA4 111-5 ise, ominated by the $76 million n 1977 and contains a 556-room retail space. With the exception of future hotel developments and transportation plans, both discussed later, major projects proposed for the general downtown area are briefly described in the following paragraphs. The facing map shows the location of these 1. major developments: Downtown Government Center. Currently under development, these city, county, state and federal government buildings will cost $147 million and are located on 30 acres west of the CBD. The Miami Police Headquarters and a Florida State office building are already completed. By 1983, a second state office building, administrative buildings fax the city and county, a central library and art and history museum plus the county's main rapid transit station will be complete. Financing has been arranged for most projects with same currently under construction. 2. Plaza Venetia. This $200 million three-phase complex to include apartments, a hotel and retail shops is currently under construction. The 32-story rental apartment complex with 300 units is scheduled for completion this year. Later phases are anticipated to include 810 additional rental units, approximately 600 hotel rooms and 200,000 square feet of retail and office space. The complex will ultimately be connected, via skyway system to the Omni complex. • 1 1 I WY- 1 1 III. SITE EVALUATION 3. Watson Island. A $6 marina, rides, garden is proposed for devel Agreements have been s owns the island, with a negotiations are underw However, the project r future progress is not ce 4. Port of Miami. Expansion o assenger terminal facilities and renovation o existing space, total- ing nearly $1.8 million,iscurrently underwsy. A far-reaching plan to make the port accessible to super freighters is currently under study. 5. World Trade Center. Consideration is being given to the development of a 50-story office building above the parking garage planned for the Knight Center. The complex would be intended to house primarily international trade firms and financial institutions. 6. Brickell Avenue Office Developments. The following projects are either under construction or firmly planned for development: a) Flagship Center. A $30 million, 14-story office building to house the headquarters of the Flag- ship Bank chain is currently under construction. b) Barnett Bank Center. Construction of this $30 million, 15-story structure is expected to begin during the latter part of 1979. c) Caribank Building. A 13-story office tower for Caribbean National Bank is scheduled to begin construction in late 1979. However, zoning variances are still being sought. d) Interterra Building. A 20-story, 225,000 square foot office building with a 600-car parking garage is also planned for Brickell Avenue. De- velopment plans have been approved and construc- tion is scheduled to be completed by mid-1980. III. SITE EVALUATION Claughton Island,. According to the developers the first phase of this $150 million project is antici- pated to start construction by late 1979. Cheezam Development and Swire Properties propose 2,000 lux- ury condominiums,.230,00O square feet of office space, 33,000 square feet of retail space and a lux- ury hotel. This development will be phased in over a six- to nine-year period. All of these developments point toward town area with many national Center. having a direct posi the down- ght Inter - `dust S ai.:9Zo Na7,FM��N 1610, TRANSPORTATION DEVELOPMENTS `y�y COS .; FN S VBv�c��ON. CF �,cF�1��U5 h•`�� �0�� PE The Rapid Transit and Do towel=PJ- - ems to be partly com- pleted by 1984, will have a signific nt is •n the proposed development. Two rapid transit stations will serve the BD: one at the Government Center on North- west 3rd Avenue and 5th Street, and another at Brickell Avenue, between Southeast llth and loth Streets. The People -Mover System will have several stations within the CBD. The exact locations are not as yet defined, however, it is anticipated that a station will be located in the Knight Center parking garage. To further offset traffic congestion within the CBD, a comprehensive redesign of streets in the Dupont Plaza area is planned. While no definitive conversations with government officials and others program has yetbeen made indicate that two 1 1 proposals are under consideration: 1 1 III. SITE EVALUATION mented,! 1 1 1 1 1 The I-95 off -ramps at Southeast 2nd Avenue and South- east 3rd Street are anticipated to change and ease traffic flow into the CBD. The latest proposal favors a loop which would encircle the area bounded by Biscayne Boulevard, Southeast 2nd Street and Brickell Avenue and integrate the four -block area to the northeast of the proposed center. In conjunction with the I-95 ramp modification, access routes leading from Dupont Plaza to Brickell Avenue may be changed. Within this proposal, several alternatives are being considered: Widening the existing bridges at Southeast 2nd Avenue and/or Miami Avenue. Construction of a tunnel under the river east of the Dupont Plaza Hotel and a new roadway south of the river, connecting with Brickell Avenue two blocks south of the present bridge. ome combination of the above. that rega r 1 0.006 .1 1 .1 .1 IV-1 IV MARKET ANALYSIS: CITY OF M AND CONVENTION CENTER The City of Miami Civic and Convention Center will consist of the 5,000-seat theatre/auditorium and meeting rooms listed on facing page I-3.` — Net income from the operation of these facilities would be applied directly towardrepayment of the Bonds; City. any operating losses would be• absorved by the - Utilization of these facilities would be derived from two sources: 1) visiting convention groups and 2) locally - attended events, consisting of concerts, limited theatrical productions, commencements, religious ser- vices, other community events and certain athletic exhibitions. This chapter presents an analysis of demand potential represented by these markets and projections of the center's utilization. 1 1 1 1 IV. MARKET ANALYSIS: CITY OF MIAPII CIVIC AND CONVENTION CENTER CONVENTION MARIO T ,ul 3 kS F 4 G MEN ZO gE :ENS 50° SOON �r� ''� ��c�� G 1�z` O ��y�µ�Af p�E The potential for conve � tion ;µsti` ,af.\10,� ti Ci�i'tY� s has been ' �''c determined from analyses of the si e an�i�r�,td tions which could be F„'4 IV-2 accommodatedand the magnitude and f<competitive convention Market Definition • ristics of that market, a review facilities and a survey of potential users. The size and type of visiting the main theatre/auditorium convention groups which could utilize its own seating capacity, the is a function number of first-class motel rooms of available to house delegates and the number and capacity of other meeting/exhibit Under ` any roams in the Knight Center. circumstances, the maximum seating capacity of the facil- ity would limit its use to However convention groups of not more than 5,000 delegates. based upon the current and projected hotel room supply, use of the facility would be restricted primarily to groups of not more than approxi- mately 4,000 delegates over the foreseeable future. number of existing hotel rooms which could be utilized to house Knight Center conventions has bean defined on the basis of first-class hotels located The within a fifteen -minute drive of the Center during morning and evening rush hours. Including the Hyatt Regency Hotel to be developed as part of the Center, these hotels provide a total of 3,270 roams as follows: 1 1 .1 1 1 1 1 1 NAL - CI NT • CENTER F `tsi 1109 �5 �N1 GSM � F.NP -*OtN1 �o c.JR M NUS ©'E . ' 1 �\ r "CO \`" r' CIVIC —IV-3 ove ont Plaza Howard Johnson's Plaza Hyatt Regency Hotel Inter -Continental Omni Marriott Mutiny' Sheraton River House Total Number of rooms 175 325 259 606 568 556 438 1 260 ,270, projects A projects are proposed for development in or near the downtown area which would add more than 3,200 supply. However, we are aware of only three projects, providing a total of 1,334 rooms, which, at this time, appear likely to be developed. Planned expansion of two existing hotels, the Marriott and the Sheraton River House, would add an additional 240 rooms to the supply, bring- s discussed in Chapter V, rooms to' the existing radius to 4 one time to house. Knight Center convention groups as a result of maximum room allotments for group bookings imposed by individual hotels and occupancy de- several new hotel ing the total number of qualified hotel rooms within the defined driving time 844 by 1982. all these rooms would not be available.at However rived from other sources. To adjust for these factors, we have assumed that 60 percent of the room supply, excluding the Hyatt Regency Hotel, would be available for TY OF MIAMI CIVIC a 1ek� �S Sa. 3 vF', .• •c0 •se by K l FcA= rtrua+e • ons . . c JP . cNc v ,\�� D 'le q4 tndic` d that a maximum of 450 rooms, or nearly 75 percent of Gci E. �S,i �IW.to.iais..6'0= ooms to be provided, would be allotted for ` convention use c..." • <;'-.,d esi ••justments reduce the number of rooms %".\ a ." 1 1 1 1 1 1 1 1 1 1 1 1 ,.�Laa16_ d.`ShG 'NLLCI: In the case of the Hyatt Regency'Hotel , the pproximately 3,000 as summarized below :' Total projected supply Less Hyatt Regency Hotel Adjustment for maximum allotments and occupancy from other sources Add Hyatt Regency Hotel allotment Total rooms available for Knight Center convention use Based upon an estimated average double occupancy factor of 1.5 (number of guests per room), this room supply could accommodate 4,500 people. This translates to a convention.of approximately 4,000 delegates. The number and capacity of other meeting/exhibit rooms in the Knight Center affects the type of convention which could be accommodated. This would not be a significant constraint in terms of groups requiring "breakout" meeting rooms, since the number and capacity of meeting roams provided in the Hotel's facilities and the University's conference center would be adequate for most conventions. However, a constraint does exist for groups requiring in excess of 20,000 square feet of exhibition space. Allowing for utilization of some 1 1 r 1 1 1 .1 1 .1 1 1 1 1 1 F MIAMI CIVIC F )q �NCPS\C aiibq nd "breakout" meetings, approximately 20,000 square feet gea•• d be available for exhibition use within the c�mplex. Based upon these factors, the market for convention use of the facility over the foreseeable future would consist of groups of not more 4,000 delegates which require not more than 20,000 square feet of We have assumed that groups of less.than 1,000 delegates would be accommodated entirely in the Rotel's and/or the, University's meeting facilities. Conventions ranging in size from 1',000 to 4,000 delegates are held primarily by state, regional and national trade and professional associations. Although assemblies of this size are also held by •corporations, governmental bodies, service organizations and other entities, these were not considered to be major sources of demand for this facility. The demand base for which the,proposed convention center, would compete, has been Conventions heldin Florida.. and the other southeastern Stites' by national and.'regional associations. in Florida by state associations. This gives effect to the practice of rotating convention locations around the country and state which is followed by most nations assoc ations. than exhibit space. TABLE IV-1 PROPOSED CITY OF MIAMI CIVIC AND CONVENTION CENTER ESTIMATED TOTAL CONVENTION MARKET AVAILABLE Number of conventi,ns held annuall (3) National(2) iggi_onal( State Total Group<size 1,000-1,999 delegates with exhibits without exhibits 2,000-2,999 delegates with exhibits without exhibits 3,000-3,999 deleg with exhibits without exhibits Total with exhibits without exhibits (1) By Laventhol & Horvath based upon SM Databank°Report.. (2) Throughout southeastern United States. (3) Florida only. 40 68 11 68 88 156. 8 19 27 56 93 149 25 27 1 1 1 1 number of these conventions held annually compiled from al associations which SM estImates account for, approximately 75 percent of the total association convention market in the United States. Based upon this data, we have estimated the average number of nation- al, regional and state conventions held annually in Florida and the other eastern states for which the proposed convention center could compete. These estimates are summarized in Table IV-1, opposite. As shown, the total market consists of 156 national conventions, 20 regional conventions and 41 state con- ventions. a reasonable estimate can be made on the basis of research division of Successful Meetin eading trade publication for convention Planners. This data is an ongoing survey of mere than 25,000 state, regional and nation - Competitive Factors south - There are 19 cities in the southeastern states with which Miami would compete for national and regional conventions and five cities in Florida with which it would compete for state groups. Not all of these cities would compete for larger convention groups, however, due to a lack of hotel accommodations. Only eleven cities can accommodate conventions of up to 3,000 delegates and only seven can host conventions of 3,000 to 4,000 delegates. TABLE PROPOSED CITY OF.MIAMI CIVIC AND CONVENTION CENTER" COMPETITIVE CITIES - CONVENTION MARKET Competitive for national and re ional conventions of: 1,000-1,999 2,000-2,999 3,000-4,000 delete s del._- egates delegates ALABAMA Birmingham Mobile Montgomery FLORIDA Fort Lauderdale/Hollywoo! Jacksonville Miami Beach Orlando Tampa GEORGIA Atlanta LOUISIANA Baton Rouge New Orleans MISSISSIPPI Biloxi NORTH CAROLINA Charlotte SOUTH CAROLINA Charleston Myrtle Beach TENNESSEE Chattanooga Knoxville Memphis Nashville Competitive for state conventions of: 1,000-1,999 2,000-2,999! 3,000-4,000 del_ s delegates delegates �1� 181141130*Onennionsiesesmorm 05. .NO most competitive cities for national and regional groups would g of competitive cities, indicating city would compete with Miami. (3'.v nta and New Orleans. For state groups, Orlando, Jacksonville would be most competitive. and Tampa Atlanta is the leading convention city in the southeastern region. It has two major convention centers, the Atlanta Civic Center (seating capacity Center 4,600; exhibit space - 76i000,equare feet) and the Georgia World Congress (seating capacity - 8,000; exhibit space - 350,000 square feet) and more than 5,000 first-class/deluxe hotel rooms. of these, more than 2,700 rooms have air service and been added in the last four years. Atlanta enjoys excellent maintains a very active and well -financed convention and visitors bureau. It would be the primary competitor for Miami for national and regional conventions. New Orleans ranks second in the number of conventions held annually in the southeastern region. It has two major convention facilities, the River - gate Convention Center (seating capacity - 4,500; feet) and the Louisiana Superdome. The Superdome would not be competitive for conventions which could utilize the City of Miami Civic and Convention Center. Like Atlanta, several new hotels have been constructed in New Orleans in the attracted visiting conventions to the city and promotional effort is maintained by the New last several years which have a- willfinanced and effective Orleans Tourist and Convention Commission. exhibit space - 134,000 square OF MIAMI CIVIC kte st‘' ` gi`^�c t�al ation in Florida, proximity 55 14(5101S.0 i t tfft • ns However, it lacks a major convention center:and'can only:ac- at IV-8 plus a large supply of first-class hotel rooms compete very effectively for national, regional and state date groups requiring meeting space for not'More than 2,000 delegates present. The city is planning development of a center with 40 meeting rooms and 325,000 square feet of meeting and exhibition space. If this center is developed, Orlando would be competitive for all groups which could utilize the planned City of Miami facility. Jacksonville and Tampa have convention centers capable of accom- modating groups of 3 hotel facilities to cater to conventions of more than 2,000 delegates. These cities compete with Miami/Miami Beach, Orlando and Fort Lauderdale/Hollywood primarily for state Market Survey, 000 delegates, The survey sample was drawn at of state associations which have held a convention in Florida and national and regional associations which have held a convention anywhere in the southeastern United States in the last three years which could have been accommodated in the proposed center. Interviews were conducted with either the executive director or convention planner for each association and responses were tabulated sepa- respectively, but lack adequate To assess the market potential for convention use of the proposed facilities, we conducted a telephone survey of 66 prospective user groups. random from a listing obtained from SM Databank IV. . • T LYSI9�: c AND C N NTION C T OF MIAMII CIVIC IV-9 national groups to identify differences in the market segment. It can be account for the greatest proportion of respondents the total TABLE IV-3 SURVEY RESPONDENTS Number Type of Association Respondents, State Regional. National Total. 32 16 '. 18 now `Percentage Of Total 48% 24 27' 100"/ * Co1i n-does not total 100.percent due to rounding. To determine the likelihood of the respondents' associations to utilize the proposed facility, the. following question was asked: "A convention center complex is planned for development in downtown Miami, Florida. The complex will consist of: ▪ A 5,000-seat theatre/auditorium ▪ 21 meeting rooms ranging in capacity from to 1,000 seats. 20,000 square feet of exhibit space A 608-room Hyatt Regency Hotel. ... roptismommewomorsowsworommtemorew • f 1 OF MIAMI CIVIC ities, haw likely 'would you• be to select a convention in the future? Table IV-4 presents a summary of responses to this question, regated by state, regional and national associations. IV-10 Response Very likely 72% 31'/. Not very likely 28 50 No opinion 0 19 Total. 100% 100% 2••.= TABLE IV-4 SUMMARY OF RESPONSES BY TYPE OF ASSOCIATION Percentage of Respondents State Regional, National All. 47% 50% 50 44 3 6 100% 100% MINIM !MEC In total, 50 percent of the respondents indicated that their association would be very likely to select Miami as the site for a future convention; six percent had no opinion and 44 percent indicated that their as- sociation would not be very likely to select Miami. The highest percentage of positive responses, 72 percent, was obtained from state groups. The low- est percentage, 31 percent, was from regional groups. The percentage of positive responses obtained from national associations, 47 percent, was con- sistent with the total market. IV T A' CON IS: ON C ER MIAMI CIVIC `0° CPS '4j' e t he ow couldco'dtec `r�a�a�iv�4.� 4 C. ,c_» P\laf c. ���' e5`0 %iYt'g rstet,e\\ d14+►a ,gyp \�:,.. ��. \ -_• ` i"'','V • al esults of this survey indicate 'that 1 markets with the strongest sources nal associations. rket Penetration and Projected Utilization We believe that with the development have several advantages in competing would be the nature and quality convention center, the University's conference center and the Hyatt Regency Hotel would constitutea self-contained convention complex providing a range of facil- ities and services superior or equal to those available in any of the competitive for the the Knight 1V-11 Miami of, -demand Center, Miami would convention market. Most influential cities. of the center itself.. In combination, the City's In addition to seminars andconferences in its own facilities, the University's conference center would enhance utilization of the City's facilities by major conventions through the conference planning, audiovisual and programming services it will offer. The University would also be a direct market source for the City's facilities through major symposiums held by its law and medical schools. The presence of the Hyatt Regency Hotel as an integral part the Knight Center would enhance utilization of the facility by major convention groups for two reasons. First, it would permit convention staff and VIP's to be housed on the same premises where convention events take place. This is a significant advantage for larger 'conventions which require coordination of several events r r r SIS: CI ON ION C •to nd us 3r,leatai4 esq. 14 speakers. s etiteidirkta‘010*4 10 MIAMI CIVIC ‘1:ilet4S1 \\:1C.: \„' cadd advantage as Hyatt's marketing organization ii Considered to be one of - - the most effective among major hotel companies. s .01%•," tional programs IV-12 Second, the hotel would conduct its to attract visiting conventions. In e affiliation of the hotel with the Hyatt chain would be an Miami, in general, has several advantages as a convention city: • „ - • service 'fOr. both 'domestic national travel. '• r „ ' , weather climate year-round. , , ,„. „ • • • , • , . • . ' , • , • , - ...„ .. • • •. . — . • „ n abundance of recreational activities. • - NUinerotia:attractIon. Based upon these factors and the results of our market survey, we believe it is reasonable to expect that share of the convention market. This cities with which Miami would compete there are 19 cities which would be competitive with Miami for national con - Miami could attract its proportionate is defined on the basis of the for each market segment. number of For example, ventions of 1,000 to 2,000 delegates, or a total of 20 competitive cities. Thus, Miami's Proportionate share of this market would be five percent (1 20 .05). 1 r 1 r r IV. .;, F MIAMI CIVIC isting of Miami's proportionate share of TABLE IV-5 MIAMI'S PROPORTIONATE MARKET SHARE* Convention ScoDe Group Size National Rezional. 1,000 - 1,999 delegates 5% 2 000 - 2,999 delegates 8. 3,000 - 4,000 delegates 13 13 50 State 5% 8 17% 33 .‘`'-'14041,.:1.::.t:in:ii:iith'-itr:"i'n.i..'"."i-:'±'''' 7-L7.1--:°"-f':':i11-..1..")-''.'""...-t.i'.t..-.-"'..e'1'c47-..-7s:--:-listed -...:'..':':'''1.--..:41e:.-..1.-..'.''. B*IviSid:...,..'o'-::-,.iti.'.,..:i:e.1....-::';r...,#'...:i.'.c*'' ',.';''!i'r '''''',*1,—.. '°, *11-'°f.. ::6- 6il•-.--'`'•'',6-:-n:ti:67S 1"t;°jea.....t...*„.,.,4'.'.ii:.:t::::,:.:::11:,ilize the.,,PiOpOS' '-.0-;‘&.ventI.O.4.1,:r.Center,:•:4*,,..34Y.,:..:4:s,.4S:i',.fC,I...,1ov/..:.:.,s,,..;.::::: :-.,..,,r ..-.• :, ...,:,;,,,,, ,..,..,‘ , :,,,,,,,, r , '---.'i•.,:,,,,,,_.-:,.,:,:..:--„..-..•.....,.-:-...•..: .....,.... :...... ..., .:,,....,,.,.„ .. , , , . .. . .._ _, ,..„. ,,......,...,, ....,,,,..:....,, . „,..._ .. _ .. . ,,.. . ... , --•-•',-- '-'::-.:-.,:.:.::.-",-,-..--.-.:...:-.•......:....:..... ' ' ''' --- - .'•-•-;-..,--..•.;,.......-...r,..,..,,,........„.., ,,.... -- .• • .. , ...,, ..-.....,.,,.. ............._ .-.-.:-..-., .-- -......: .,.......-:.,,,...-.,,...,..,,,--,,..,,........,..,........,..,-..,,-::.::: • r ■ r • r IV MIANII CIVIC LE IV-6 ER OF CONVENTIONS 14 NumberConventions Annually '1982 '1983 198-1 91 •nal Conventions: 1,000 - 1,999 delegates 4 5 5 2,000 - 2,999 delegates 3 3 3 3,000 - 4,000 delegates 2 2 Subtotal _9 10 Regional Conventions: 1,000 - 1,999 delegates 2,000 - 2,999 delegates 3,000 - 4,000 delegates. Subtotal State Conventions: 1,000 1,999 delegates 2,000 - 2,999 delegates 3,000 - 4,000 delegates Subtotal Total LOCAL THEATRE EVENTS The main theatre would be capable of hosting a wide range of events which would be attended primarily by local residents. These include concerts, ballet, limited opera and theatrical productions, commencements, religious services, addresses and other community. events. With the ability to utilize �,ikC�'s7�.+ltsl.iv"i+rfil.4 <vA r.ul ._ M aa.,mar Fr, Ur.3) IV. IlklIKEkND TCOANkNVENIXT CITY °F 1411M CIVI 17:4"Of -aPa"- FT r7 I Stje ErT T up to approximately 10,000 square feet o fl.P.P.•;1.°F:"El.:. '...,f.6:2SSPS1:3CL! RE41594'. 787;S° SIOINS :CENTER To eE 7-is;-.77.777,444734., .1979. _1:7015te) r "As\'0i4grarea• p the facility could also host exhibitions of tennl other athletic events. Major musicals, classical ballet and grand opera co not be accousmodatect, ho;.lever, due to the lack of a proscenium stage. Sponsoring Organizations The Dade county council of Arts and Sciences lists more than 100 cultural arts organizations active in Dade County, excluding school and univer- sity groups. A survey of these organizations conducted by the Arts Council reported a combined. budget of more than $9.5 million in 1977 for 49 organize- - - tions which provided such information. Among those organizations listed are two opera companies, twenty-one music groups, nine dance groups and fourteen theatre companies. Responses by roughly one-half of these organizations indi- cated more than 2,400 performances were held in the Dade County area in 1977. Although mazy of these groups are too small to utilize the Knight Center the- atre, the existence of a strong base of sponsoring organizations is supportive of the potential for larger theatre events. Also, these statistics pertain only to local groups and do not include performances by visiting organizations or by headline entertainers. Market Area Most theatre events can general.l.y be expected to attract frequent patronage from the area within a 20 to 30 nii.nute drive. Major events can be expected to draw patronage from areas within a 45 minute drive, or more. Given II Ii 1 LI Amn CnNWATTION UNTER rn .... ilF4 6 IV. MARKET ANALYSIS: CITY OF MIAMI CIVIC As OF 0,,;„.... '. uSto • FIJA.,':CILIA'1"i'°.5-7:-FtIrl-v Ful-1;;;Lio:t2r1.41,4A...4-,:s. ''' • •(cIalet .11AL Um'. ...:11' ''''iiiiitot alt46207 these conditions, the location of the Knight 4"."tP)1.6447,13pX01' 7 IS s4(17416411 ts %-eiAirtrfte0617 To provided by area expresswaYs woUld enable most events held •ffSioN tronage from all. of Dade County and major events could be expected to dra from all of Broward County as well. This encompasses more than 2.3 million residents at present and future growth is expected to bring the combined population of the two counties to more than 3 utillion residents by 1985. Not included in these statistics are seasonal residents or the more than 7.2 million tourists who visit Dade and Broward Counties annually, sub- starLtial markets by theniselves• The demographic profile of both counties is highly favorable for the theatre market - more than 45 percent of all households report an situlual effec- tive buying income of $15,000 or more and more than 50 percent of residents are over the age ,of 35. . Existing Facilities There 4re':fiveMajOr theatre/auditoriums in the Miami/Fort Lauder- dale area which cater to one or more of the types of events which could be held in the Knight Center. Following is a description of these facilities and a summary of their utilization: IV. MARKET ANALYSIS: CITY OF MIAMI CIVIC AND CONVENTION CENTER Dade County Auditorium The Dade County Autitori um is located 3 central business district and owned and operated by Metr county.. It was constructed in 1950 and recently renovated at a cos $1.8 million.million. The acilitY contains 2,501 fix"seats and is equipped wit a proscenium stage ca7a dating 'most musical, opera productions.' The 'theatre's acoustical quality is C onsideied and theatrical to be adequate. This facility was utilized for an estimated 275 events in 1978 (detailed records are not available) consisting primarily of band concerts, opera, symphony, ballet, and community events (religious services, commence- . slants). Gusman Cultural Center The Gusman Cultural Center is located in downtown Miami and is operated by the City of Miami through the Off -Street Parking Authority. It is capable of hosting limited seating for 1,883 persons and contains fixed sea musical and theatre productions. utilized for an estimated 271 events in 1978 (detailed records are not avail- able) consisting primarily of performances by headline entertainers, plays and community events. The facility was renovated in 1975 and was IV. MARKET ANALYSIS: CITY OF MUM CIVIC AND CONVENTION CENTER Parker Playhouse The Parker Playhouse i contains 1,200 fixed seats. It was drama and small musical productio events n 1978, consisting almost. Sunrise Musical: Theatre' This facility was:: located i construe ns. The facility hosted an estimated entirely of plays' and small musicals. IV 7044 Op t,• i ` • • n downtown t",toudes4# R,00* 0% ted` in 1966 and ace lac iv �seo' TO 6 constructed in 1976 and contains 4,133 seats in an amphitheatre configuration. It is well suited for concert performances but can accommodate only limitedversions of theatre, dance and opera the lack of a stage tower and adequate backstage facilities. due to The theatre was plagued by unfavorable publicity resulting from management problems and cancellalions of performances by headline entertainers during its first two years of operations but was taken over by new management in September 1978 and appears to be operating smoothly. It is utilized pri- marily for concerts and hosts almost a full calendar of headline performances during the months of December through April. Theatre -of the Performing Arts located adjacent to the Miami Beach Convention "Center and is operated by the City of Miami Beach. It con- .1 1 1 1 1 1 1 t 1 1 1 IV. MARKET ANALYSIS: CITY OF MIAMI CIVIC AND CONVENTION CENTER ts.ins 2,901 fixed seats and accommodates ma cals, opera and ballet. This facility offers the finest setting in South Florida theatrical performances and is utilized primarily for these occupied with 255 events in 1978. War Memorial Auditorium events. It was Located in downtown Fort Lauderdale, the War Memorial Auditorium provides seating for 2,500 persons and is a multipurpose facility. Although it has been utilized for theatrical and opera performances, it is not well suited for such use and requires serious artistic compromise. Concert per- fomances however, are adequately hosted and account for most of the facil- ity's use. In total, the auditorium was utilized for 145 events in 1978. Proposed Facilities The City of Fort Lauderdale has been considering the development of a performing arts center for some time. No firm plans have been•made, however, and it does not appear likely that a center will be developed in the foreseeable 7 7 7 7 7 7 7 7 r IV. MARKET ANALYSIS: CITY OF MIAMI CIVICI AND CONVENTION CENTER Utilization of Existins Facilities t� 3 `l'. f IMP r:�� j� ; t,.r�Gq c�ue MEti?nets, Utilization of the major` theatres described prey proximately* prised of 206 events in'1978 with an estimated musicals, ballet, opera and plays, orchestra and 50 Oy 'v - M hits cq percent of these 30 percent comprised of band, choral concerts, 15 percent comprised of community events and performances by headline entertainers. This event -mix facilities which, except for comprised of 5 percent comp of the size and nature of is reflective these the Sunrise ilusical Theatre, limits their indicate ities A review of booking that during the months are in use an average of thata. use by headline entertainers. schedules and discussions with theatre operators, December through April, most of these facil- six days each week. Theatre operators indicate turned away during this period. of significant number of events are The acoustical quality and sightlines in these facilities are gen- erally adequate for most patrons but, with the exception of the Sunrise Musi cal Theatre, none offers exceptional patron amenities. In general, the substantial patronage of these facilities despite this lack of amenities, reflects favorably on the potential for a theatre which does provide such amenities in addition to satisfying technical and artistic requirements. 1 1 1, 1 7 7 p IV. MARKET ANALYSIS: CITY OF MIAMI CIVIC AND CONVENTION CENTER Advanta esand Disadvanta The Knigh existing facilities lization. The size ty, these factors. mances by es of the'`Kni ht Iv q 041/ f. nter 'fiheaLre., op. T o v�cFc4/> fie, advent _ sFoyeifk, FN> � T Vic* O t Center Theatre will have several which can a expected to enhance its potential and flexibility of the theatre in terms of seating capa are the most influential of able to host perfor- b coupled with its planned acoustical seats, the facility will be s and With 5,000 headline entertainers prices in the $12 to $18 range which are range. quality, contemporary • musical groups at ticket is compares with prices in the $20 to $30 required for a facilitywith,3,000 seats or less. of the facility would not be bility will permit use in five 2 000, 3,250, and 3,750. imited to'large events smaller seating confi Utilization however, since its divisi- rations: 1,250, 1,750, The location` of the Knight Center would also be a significant ad- vantage particularly in attracting patronage from throughout Dade County. The remote location of the Sunrise Musical Theatre (the only existing facil- ity suitable for performances by headline entertainers) and traffic congestion on the one artery leading directly to this theatre have limited its patronage. Finally, the patron amenities to be provided by the Knight Center would enhance theatre use. Valet parking and food and beverage service within the theatre and the Hyatt Regency Hotel should greatly benefit theatre patron- age. 1 1 1 1 1 1 1 1 IV. MARKET ANALYSIS: CITY OF MIAMI CIVIC AND CONVENTION CENTER Proiected Utilization OP 46,4., Utilization of the theatre for locally -attended ev derived from events which are currently held in existing facilities as as events which cannot now be held in the area due to the lack of a facility which can accommodate 3,000 to 5,000 patrons. -Py r: • P 4,, r. ' " k C; 4-(41 044 f, r7- up 44r- Weeicr'-/ert/ aciselei Utilization would be comprised of two categories, ticketed and _ , • non -ticketed. Ticketed events would consist of performanCes by headline . • - entertainers, contemporary musical groups. symphony, ballet, liMited theatrical Performances and pageants. Sports exhibitions would a! -so be included in this • • •,, •.„, • ,•:: -.• : , •••:-::: , ,• • • - • Interviews with show producers indicate that substantial utilization of the theatre in its 5,000-seat configuration could be anticipated from head- line performances. Similarly, performances by renowned symphony and ballet groups offer significant potential for use in the 3,750- and 2,000-seat con- figurations. Theatrical productions could be expected to utilize the theatre primarily in the 2,000-seat and smaller configurations. Sports exhibitions could be expected to utilize the facility in the larger seating configurations. Non -ticketed events would consist primarily of religious services, commencements, rallies and speeches. Such events offer potential utilization of the theatre in all seating configurations with commencements and religious services accounting for most utilization in the 3,750- and 5,000-seat configu- rations. Ticketed events Non -ticketed Subtotal: Total events. For Average. Group Size 2,100 4,000 42 159 159 TABLE IV-8 PROPOSED CITY OF MIAMI CIVIC AND CONVENTION CENTER PROJECTED TOTAL UTILIZATION OF THEATRE/AUDITORIUM 1982-1991 Convention Local Total 117 117 Number of Event -Days 1983 1984-1991 Convention Local Total Convention Local Total.;: 27 28 55 30 30- 60 33 32 65, 21 9 ° 30 21 32 . , . _ 24 12 36 180 12. 12 24 9 9 -- . 69 56 125.. 57. 46;.. 103' 60... 52 1�2. �'1 _ 22 281 69 231 >57 205 262 6�#�� = fl F•..-I, c� dG cos 1,.• A �t� .S, 4r �, Gf, l ,p 09 7x, , ad' (IL� SFs � � ) s Ills..lm IV. MARKET ANALYSIS: CITY OF M AMI CIVIC AND CONVENTION CENTER Based upon our analysis of th additional utilization from events not n utilization of the theatre as follows: • OSQP exit*4$ Aj14 id;1 , mom%14 TABLE IV-7 e �,•, �� %cam, vq PROJECTED THEATRE USE - LOCAL EVENTS Type of event Ticketed Subtotal Non -ticketed Subtotal Total events Average Attendance 2,100 4,000 1,500 2,500 3,500 SU/44ARY OF PROJECTED UTILIZATION IV-23 et and Allften shave pro U� 06.,, �� (4,l^ -A114 t9i rO Number of Events Held Annually 1982 1983 198--- 4-1_ 117 117 117 42 52 58 159 169 175 28 30 32 9 11 12 g 11 12 46 52 56 205 221 231 or TabieIV-8i opposite, presents a summary of projected utilization of the main theatre/auditorium expressed in number of event -days. Two events in one day constitutes two event -days and would result primarily from matinee and evening performances by theatrical and concert groups. Event -days from conventions is based upon an average duration of three days each. A V A p 1 1 1 V-1 MARKET ANALYSIS: HYATT REGENCY HOTEL This chapter of our report presents an inventory of existing and pro- posed facilities with which the proposed hotel would compete, an analysis of the magnitude and sources of demand available to the hotel and projections of its annual average occupancy. nually for the years 1982 - would remain' intery and upon Market demand and occupancy are projected an- 1986. Thereafter, it is assumed that occupancy constant. f room demand are based upon information obtained from conducted with management representatives of the hotels indicated information available to Laventhol & Horwath. r MI COMPETITIVE SUPPLY Based upon the location, quality and operational cone posed -hotel, we have identified ten existing hotels with which it wou •ri warily compete. These hotels are those which cater primarily to commercial travelers and tourists who desire first-class/luxury lodging accommodations in or near the downtown area or to convention and meeting groups not requiring extensive. recreational amenities, particularly golf. Excluded from this compe- titive supply are hotels in or near the downtown area not currently achieving an average rate per occupied room of $40 or more. Eight other hotels have been identified as secondary competition for the convention and meeting market. Among these are seven major convention hotels located in Miami Beach or on Key Biscayne and the Doral Country Club, located west of Miami. Table VI-1 presents a: listing of these hotels and information con- cerning their facilities and rates. rior -lot' ---,el! 7,411 Facilitv'snd location Primary competition Omni International Hotel Biscayne Boulevard at 16th Streets,. Miami, Florida Intercontinental Four Ambassadors,,; 801 S. Bayshore Drive Miami, Florida 1 B? '!'1 i Tm al 7.'11D s a1. Miami Marriott 1201 N.W. 42nd Avenue Miami, Florida Sheraton River House. 3900 N.W. 21st Street Miami, Florida David William 700 Biltmcre Way Coral Gables, Florida Coconut Grove Hotel 2649 S. Bayshore Drive Coconut Grove, Florida Rainy Hotel 2951 S. Bayshore Drive Coconut Grove, Florida Sonesta Beach 350 Ocean Drive Key Biscayne, Florida Sheraton Royal Biscayne 555 Ocean Drive Key Biscayne, Florida Fontainebleau Hilton 4441 Collins Avenue Miami Beach, Florida (1) Rates are provided for the season (S) and off season (2) Maximum banquet seating for single group. (3) Amenities key on page V-4. (0). TABLE V-1 'SUMMARY -OF CONPETITIVE•FACILITIES Number, of Year Published rates. 1) o ened -Shale` . ' Double ueb t___ rooms , " -�— 1977 S $69-$77 S:$69-$85` 556 " 0 $46-$54 0 $58-$70, 551. 1964 5 $55-$77 0 $45=$60 S. $60-$82, O $55=$68 . Largest (2) function room;;; (Sestina -capacity)': 1,500. 1,700 $65 - 400 438 1972 0.: $48 0 $56 1977: S ' $54 . $60 260:. $46 O $52 ;:1964 S '.$45-$60' 0;$30-$35",. S $55=$65 O $30-$35' -• - 400 100 Amenities (3) A,B,C,D,E,G A,C,E,G A,C,D C,D A,C,E s $53-560 400 A,C,D,E. 17S: 1972 , g $48_$55 0_$35_$41. 0 $37-$43 S $60-$140A_ 0 81 1975 S•560-$85 :0- Same . s, 1- C 0 Same ^i 293 210 S $95-$110 500 - O'D_lF b 1970: :; 0 $45-$70 ; 0 O:S45=S70 0 $45_$10. ,1.: C ,- S .$85-$95 - (okX.WF,, 1960 S;S8Q-S90 300 � ' . ^r C,, 0 $38-$50 .:0:S40-$52 '' - 'I'? } , Cs �7 1951 8 $50$100 .. S $50-$100 ..nor. C AA� .D.E. 0 $40-$55 0. $50-$65 c ,� �" :2 o~ f ti 4 1,150 (continued) 3,000 w Ra - - d -Re i -mai -mil Facility and location Secondary competition (continued) floral Country Club 4400 N.W. 87th Avenue Miami, Florida Key Biscayne Hotel 701 Ocean Drive Key Biscayne, Florida Eden Roc hotel 4525 Collins Avenue Miami Beach, Florida floral Beach hotel 4833 Collins Avenue Miami Beach, Florida Konover hotel 5455 Collins Avenue Miami Beach, Florida Americana Hotel 9701 Collins Avenue Miami Beach, Florida Deauville Hotel 6701 Collins Avenue Miami Beach, Florida Carillon Hotel 6801 Collins Avenue Miami Beach. Florida (1) (2) (3) Number of Quest rooms TABLE V-i (CONTINUED) SUMMARY OF COMPETITIVE FACILITIES Year opened Largest (2) Published rates (1) function room SinRle>, Double (Seating capacity). Amenities (3) S :$86-$114' 0 $46-$.64 1968 S:$59 $77 S$64-$82 0 $33444 O:$36-$44-. 717 . 1955 S''-$69-$89 0.;$29-$44_ ,' 550.; 1958 S $62-$71 0 $34=$43 Rates are provided for the season (S) and off-season (0). Maximum banquet seating for single group. Amenities key: A - Specialty restaurant B - Nightclub C - Pool D - Tennis E - health club F - Beachfront G - Ocean or bay view 800 300 A,B,C,D,E. A,C;D,F,G ,AB.G,F.G A,B,C,D,F,C A,B,C,D,E,F,C A,B,C,D,E,F,C IIII�111 var . MARKET ANALYSIS: HYATT REGENCY HOTEL The Omni opened in 1977 and i the downtown area. It is one element of an 900,000 square feet of enclosed retail mall $80 mi space and a 2, garage. The hotel achieves a very high occupancy American commercial travelers and tourists and and caters uxury otel heavi to convention groups. The Intercontinental Four Ambassadors, formerly the Sheraton Four Ambassadors is currently undergoing a $15 million renovation. Management of the hotel was assumed by Intercontinental Hotels in 1978. Occupancy of the hotel was declining under the previous operators but is likely to increase significantly following renovation and due to the marketing organization of Intercontinental which is particularly effective in Latin America. The David William Hotel is located in Coral Gables and is operated as both a transient and apartment hotel. It is known particularly for its restaurants and caters heavily to commercial travelers and tourists. The Mutiny Hotel is located in Coconut Grove and opened for transient rental in 1975 following several years as an apartment hotel. It caters heavily to foreign commercial and tourist travelers and is known particularly for its lounge and restaurant which are operated as a private club. The Coconut Grove Hotel is also a combination transient/apartment hotel. Seventy-five apartment units were converted to transient rentals in the past year with 30 apartments remaining. MARKET ANALYSIS: HYATT REGENCY HOTEL The Sheraton Royal Biscavne is op ganization and was expanded from 110 rooms to its caters heavily to tourists and small meeting groups. The Sonesta Beach is Key Biscayne's newest hotel and is known p cularly for its restaurants. It caters to tourists and convention groups and achieves a very high occupancy. The Marriott Hotel has been expanded twice since its opening in 1972 and construction of an additional 100 rooms is planned for late 1979 or early 1980. The Sheraton River House is Miami's newest hotel and will alsnobe ex- panded within the next twelve months. An addition of 140 rooms is plan ed. The Fontainebleau Hilton was acquired by local interests in 1978 and came under Hilton management in July of last year. A $15 million renovation is in progress and officials of the hotel report substantial future convention bookings. The renovation of this hotel is expected to significantly enhance its competitive position in the convention market. With the mitcepti.on of the Doral Country Club and the Key Biscayne Hotel, 6.11 of the properties listed as secondary competitors for the conven- tion market are located in Niami Beach. In general., they are not considered •• . 7 to be priMary comPetitors for the proposed hotel due to the conditiOn or nature of their facilities, e.g. number and size of meeting rooms. The Doral Country Club is the golf -orientation of most of its patr of its rate structure and beach orienta • osed -Hotels There are no hotels currently under however, several projects are proposed for development. projects which appear likely to be developed: iden etitor due to AS CFJUL 31 trIg dam.... TO BE uSED ONLY FOR MANAGEMENT DI;;Cli;;SIVIvFOPPC.SES:ENCAGEMEN? IS INCLIMPLFrE: HIS WI VT IS SUBJECT TO i-u- REIVIEWAN POSSIBLE REVISTN constru . rea, We are aware of three • A 630-room hotel is planned for construction on a site located two blocks east of the Knight Center site. The hotel would be operated by Canadian Pacific Hotels and is planned as part of an office/ condomimium/retail complex. • A 500-room hotel is planned for construction on a site located near the Omni complex. • A 204-room hotel is planned for construction on a site located in Coconut Grove near the existing Coconut Grove Hotel. At least four other hotels, representing 2,000 rooms in total, are being considered for development in the downtown area. However, the status of these projects is, to our knowledge, uncertain. Therefore, they have not Marken Primary TOTAL Commercial Tourist Convention/ meeting Secondary supply:; TOTAL Convention meeting. Other * TABLE'V-2 ESTIMATED MARKET DEMAND 1978 ALL HOTELS Occupied rooms Number Percent to total Available rooms ` 1,045,964 100.07. 1,397,95 345,970 33.1 269,662 100.07. mmOMMIC 59.6 40.4 * Not markets for the proposed hote Occupancy percentage 64.5% 1 Ow Pm RIO MARKET ANALYSIS. HYATT REGENCY HOTEL been included in our projections of futur DEMAND ANALYSIS Occupancy and Market Segmentation Table V-2 presents a summary o total competitive supply in 1978. Markets other than convention and meeting groups are included for secondary' hotels to provide a complete picture of would not be shared by the proposed roonviall S 9 � p�, Fc . 2'�� Did, O their occupancy. However, these markets market "`demand experienced the hotel as they consist primarily of tourists seeking beachfront accommodations. Commercial Demand Demand from business travelers accounted for 33.1 percent of the market for the primary competitive supply in 1978. However, when the Fon- tainebleau Hilton is excluded, this market share increases to 44.7 percent, representative more of the market for center city hotels. The commercial market reflects little seasonal variation although demand patterns vary significantly on different days of the week. Peak considers - demand is experienced on Monday through Thursday; bly lower, corresponding to normal business days. weekend demand is Growth in this market has occurred steadily in the last three years V. MARKET ANALYSIS: HYATT REGENCY HOTEL as a result of increased commerce and industry in the Miami area. 0n the basis of planned' office developments in the downtown area, additional development to be stimulated by the forthcoming rapid transit system, and growth in the Miami economy in general, we anticipate, continued increases in com- mercial lodging demand and have projected growth as likely follows: ea 1979 379,100 96% 1980 415,500 9.6 1981 455,400 9.6 1982 499,250 9.6 1983'_ 537,250 1984 578,200 1985 1986 '6 Rounded ,6ectel , V U •.� �U� 3 ��y . Gti�EN�, :test �Nb�EPSC ) ) `', �F��G��' �5 SV �StiO0�;F �,�;�'� �:.;�1S �K,f +BCE RED�.�`"�^gip►F`i' � p�t5t� PO55Tourist demand, primarily • f=tin America, has been the growing source of lodging demand among the primary competitive supply. The development of this market has been especially beneficial because it has re- sulted in increased demand primarily during the summer months, the traditional off-season for domestic tourist travel to Florida. This has reduced the sharp seasonal fluctuation in occupancy formerly experienced by most hotels. Tourist Demand • Year 1979 1980 *Rounded., TABLE V-3 PROJECTED CONVENTION/MEETING DEMAND Primary suppl*':. Room Growth demand* rate ' 443,300 450 600 470,300 484,400 498,900 3 595;400 513,900 3 . 601;400.- I 529,300 3 - 607,400 1 545,200 .3 '613;400 I 3% 3 Secondary supply Room Growth demand* rate 572,200 17. 577,900 1 3 583,700 .5139,500 Market created by Miami Civic Center* Convention Center Room Growth demand rate 114,000' 120,000 138,000 138,0 Total: market Room ' Growth demand:: rate 1,015,000 1,034,500 1,054,000 1,187,900 1,214,300 253,300 1.9% 1.9 1.9 12.7 2.2 3.2 1,2 700 1.7 .11•0144 V. MARKET ANALYSIS: HYATT REGENCY HOTEL up Based upon increases experienced in the past inents in penetrating the European tourist market brought about by new air routes, we expect strong growth in this market and project demand through 1986 r r r r. r as fo3.3.ows: Year Room demand 1979 294,400 1980 321,400 1981 350,900 1982 383,100 1983 410,600 1984 440,100 1985 471,700 1986 505,600 Rounded r p Convention/Meetina Demand three years and develop - Grow h rate 9 .2% 9.2 9.2 9.2 7.2 7.2 _ li? Ni.1 POSSJBL-EirGffittht Y3;10R1979424N4 - 4 GE14-- 64,7-41.64? . !!'v JPT'OSF::: EWA GEMEVY IS N 011,1FT IS SOISJEcrl-Cr - As discussed in Chapter IV, the combined facilities Center are expected to attract demand from convention and meeting groups which have previously not come to Miami due to a lack of adequate meeting and hotel facilities. In addition to the new demand, growth in the area's present conven- tion/meeting market can be anticipated as a result of forecasted expansion in the eCenenSy'lihiCh will stimulate demand from both corporate meeting groups and asSOCiatiOns4:PartiCularly those involved with international trade, tourism and #0.007:::Withis. basis, we project total demand to be as presented on Table V-3, opposite. r 74;r r •. r r t V. MARKET ANALYSIS: HYATT REGENCY HOTEL PROJECTED AREA OCCUPANCY Table V-4 presents a summary primary hotel group considered lar summary for the seconday group competiti is would complete for only a portion of This stimmary reflects to the competitive supply discussed Year-,, .197919, 1980 1 19.82: /983_ 1984 1985'. 198 '..r, not that et. simi- e proposed hotel the impact on area occupancy of the additions earlier, including the proposed hotel. TABLE V-4 PROJECTED SUPPLY AND DEMAND PRIMARY COMPETITIVE SUPPLY 1979 - 1986 Average daily room sumplv* 3,830 3,060 34:83734 °0 3,2709 06 6 '012 4 '°56 6,012 4 292 69012 4,576 6,012 4,825 6 6,012 5,092 Average daily demand *includes proposed Hyatt Regency Hotel. Average annual 222112121.1... 79.9% 85.5 85.9 67.5 71.4 76.1 80.2 84.7 V. MARKET ANALYSIS: HYATT REGENCY HOTEL PROJECTED OCCUPANCY: PROPOSED HOTEL Projections of based on our assessments penetratingthe available i occupancy' f of its competitive advantage markets. the assumption that the V.12 ' +:0S CA. r -:1• •r''-• •s Gr�C F , F . :,• m the prop d t pikS ieve ap ,prepared roeisedv#ice}gbl)no, k 4C/fi1/, ':.*--,primary influence on t e pzo'idcons GUn, hotel' would give booking preference to co. -nti n and, meeting groups, including groups attending conferences in the University's conference center. This assumption i based upon our understanding of the spirit 'of the agreement between the City, as gleaned from the agreements themselves and of the three parties. the University and the Developer discussions with representatives On this basis, the starting point in our approach has been to pro- ject occupancy derived from the University -related conferences. Outside con- vention and meeting demand was then projected, followed by demand from com- mercial travelers and tourists. University -related demand has been projected on the basis of estimates of current demand and projections of future demand from Knight Conference Center activities as provided by the University. Demand from other markets has been projected based upon anticipated market penetra- tion. Note: Market penetration is expressed as market share. Proportionate share hotel expressed as a percentage of supply. t MOWN. a percentage of proportionate is the number of rooms in the total roams in the competitive • V. MARLIT ANALYSIS: HYATT REGENCY HOTEL University of Miami Demand projections of room demand to be generated from the UniversitY's Knight Conference Center, prepared by Ellerbe Associates, consultants to the University, reflect the maximum utilizatiott of approximately 77,000 rooms annually to be attained in 1984. Based upon seasonal patterns of conference scheduling and incorporating a factor for price sensitivity for some con- ference participants, based upon information provided by University adminis- . trators, we conclude that approximately 60 percent of this demand could be accommodated in the Hyatt Regency Hotel. Projections of University room demand for the period 1982-1983 reflect a gradual buildup in conference programming: Year 19 198 1984 Convention a UNIVERSITY d room demand osed hotel Me6tit 4041 36 0- ‘s -ye*,fje'• -;• V.v`i4 ikeINS‘ The facili 412 62 6 and location of the Knight Center and the Hyatt affiliation of the proposed hotel would, in our judgement, enable the hotel to achieve penetration of this market significantly greater than its propor- tionate market share. The supply and demand projected for secondary competi- 1•••••••••••••••*VOMMOOMMOMs...1••=1.1.1.00••••••••••••*•••••••••••••••••••••••*•••••••• MIIIIIMPPOWSRMINNEraraffieffININOINMSFOOVN& r r r r r r r r r r r — r r V. MARKET ANALYSIS: HYATT REGENCY HOTEL tors is:included in projecting market market:' CONVENTION AND .n Projected Proportionate share 1982 6.4% 1983 6.4 1984 6.4 1985 6.4 1986 6.4 *Rounded. room V_14 ved f `duel 9 119� •.v Mft-NN.1 6 �ti•,E �0 .na c^ `� j),G� \tCw c _ ti gV $‘0 INCHp .•t,�C�cnt,��5ss 'ti 0 • or nronpated•' to ,l i`kk ration * 102% 107 111 118 116 Convention and meeting demand is pro Room demand 77,671 83,220 88,768 96,202 96,202 ected to stabilize in the fourth year of operation as a result of capacity limitations other markets. Commercial Demand created by demand from Based upon the occupancy derived from University -related demand and from other convention and meeting groups, the capacity of the hotel would limit penetration of the commercial market to a point below proportionate share. Accordingly, we have projected demand on the basis of the number of looms available after occupancy from other sources. The following table summary of market penetration and room demand: lEr t V. MARKET ANALYSIS: HYATT REGENCY HOTEL 1982, 1983 1984 1985 1986 COMMERCIAL DEMAND Protected for proposed hotel Proportionate Market share penetration * 65% 62 59 59 55 'Market penetration declines as a per total market increasing at greater Tourist Demand Penetration of the touri tionate share due to lack of capaci demand from the commercial market Year Room demand 32,801 33,593 34,386 37,296 37,296 `duel s i �.. MAN, NPGE h'�E�, `t0 v F�ati SVc pN �'. �F 5 C c�G nt G- A(� ti `� �E�w �� �� ,�• ; 4 , 0 cAB below propor- L'''vv;; �E;: asg1�,;s sie o j ected on the same basis TOURIST DEMAND Protected Proportionate share 1982 10.1% 1983 10.1 1984 10.1 1985 10.1 1986 10.1: for proposed hotel Market penetration! 22% 21 20 20 19 Roam AWOL 8,457 8,665 8,866 9,618 9,618 Orr r r r r r r r r .. t V. MARKET ANALYSIS: HYATT REGENCY HOTEL market. percentage due to demand captured by the hotel. penetration declines a at greater rates than the The preceding demand projections yield the follow cupancy.for the proposed hotel: PROJECTED ANNUAL AVERAGE OCCUPANCY PROPOSED HYATT REGENCY HOTEL 1982 1983 1984 1985 1986-1891 707. 75 80 85 85 It is assumed that occupancy of the hotel would r cent for the period 1987-1991 for purposes of ed in Chapter IX. oc- er- eat- r r r r r MN, r SP. r IRV r r r .r r Ow. r r r fag. r PO, t The Knight Center will contain 40,000 square feet of retail space in total. Of this, 26,000 square feet will be located on main building and be controlled by the Developer. The feet will be located in the base of the parking garage City. TRENDS IN MIAMI'S CENTRAL BUSINESS DISTRICT the lobby level of the remaining 14,000 square and be controlled by the The demand for retail space in Miami's central business district has increased sharply over the last four years as the area has become a prime shop- ping destination for Latin American tourists and the existing market base of downtown employment has grown substantially. This has stimulated the develop- VI, RETAIL MARKET ANALYSIS ment of more than 900,000 square rental rates above $20 per square addition to new construction, seve or converted upper level floors fro ' • , soils f net retaii6yAca—irtflpti00# le p oot otEptilue ID '1',5ikref,tkint esaeLtitik cl,,L4GE10,,,041 r nv.„,n,f1 al reF.Oerit tivikocefib)Virt Srr"4A‘t. tO selling space. shed ing stores Activity is centered in two areas. A major concentration of street - front shops, anchored by a Burdines department store (a division of Federated Stores, Inc.) is found along Flagler Street between Biscayne Boulevard and N.W. 1st Avenue, three blocks north of the Knight Center site. A second concentra- tion is found thirteen blocks north along Biscayne Boulevard and is anchored by the Omni complex (900,000 square feet of enclosed mall space with 160 tenants). Demand for space is strong in both areas with activity in the Flagler Street area being stimulated by the recent announcement of a $6 million renovation of the Burdines store and Progress on the nearby Government Center and other developments as discussed itt Chapter III. Comprehensive data on retail sales since 1972 is not available. How- ever, based upon interviews conducted with more than thirty downtown retailers, it is estimated that sales in the central business district have more than doubled since that time. Moreover, the composition of sales has shifted to- ward higher -priced goods in lines such as jewelry, apparel, accessories and electronics. This is due to the fact that more shoppers, mostly the Latin American segment, are making major rather than incidental purchases. As a result, stronger retailers have been attracted to the area. -••••••••••••• 1111.11WPIMMISIMININ014011101811KOMMIWIPIRIOW 2, RETAIL MARKET ANALYSIS The outlook for future r highly favorable. This assessme • Latin American tourism, which p cent of IA. ,UL 31 �dacel t • ctivity in the (�',eis� di riot h ,i„E�nti TO t is��d�cpfitt;1p56`poSt ��ga��s L,�;���•-" c: -;�1 A nOSV ANC, r •unts for an estimated 75 per- 1 sent]. the downtown retail market, is expected to increase steadily. • Substantial growth is also projected for Of these factors, the employment in the downtown area. latter is more important in terms of long range market stability and offers the greatest probability for future growth. Current estimates place employment in the downtown area at about 70,000 persons. It is mot unreasonable to project that this will increase substantially over the next ten years with the development of Dade County's rapid transit system and a people -mover system serving the downtown core. The likelihood that this will occur is evidenced by the developments already underway or planned in the Du- pont Plaza and Brickell Avenue areas. While Miami is expected to experience continued inflows of Latin American tourists and business travelers, this ex- pansion of the employment base in the central business district is likely to have a greater impact on retail activity. The development of middle and upper income housing occurring near the Omni complex and planned as part of the Ball Point project, will also stimulate retail demand. ADDITIONS TO THE RETAIL SUPPLY The high occupancy and rental rates space and the outlook VI. RETAIL MARKET ANALYSIS for future growth have "stimulated additional retail facilities in th ings planned or under office consideration ill contain to the conversion of older hotel buildings located along Biscayne Boulevard for retail use. the most significant proposal calls for the development of a major retail mall in conjunction with what would be Miami's largest office building four vacant blocks comprising Dupont Plaza, immediately northeast of The Bolywell'Corporation,.Washington , D.C. three of, the four vacant parcels and is seeking acquisition of the fourth parcel with plans to develop a mixed -use complex containing a fifty -story a major retail galleria. If developed, this project would office have adramatic impact on both the supply of and demand for retail facilities which, in our opinion, would benefit the downtown retail market. However, the status of the project is highly uncertain. has acquired control of 1ARKET POTENTIAL FOR KNIGHT CENTER FACILITIES Despite the town area we believe provided in the the retail market and possible addition of other retail facilities in the down - substantial demand would exist for the 40,000 square feet Knight Center. This is based on the overall strength of ompetitive advantages that a Knight Center location PIM r D r r r r r r r r r r BETA L MARIcET ANALYSIS would offer: . In addition to outside e generated internally. Hotel guests alone, projected to ties would b ■. JUL s i 1979 tdatel - r.4�,,ypGEMEN' AS BE �uR Ni IS 10 BE 1 ' Ci 4n cam: ENGAGE ME E C•+y Yttn^Qs�... is SUB.1ECT TO Di-iNrT tFu AL FEvtEA, ANC. pOSSIBLE REvISION number more than 7 would represent a grams held in the University' sources, _=u•stantial market for retail facili- OOper day on average in a stabilized operating year, Significant market, as would local attendees of pro - facilities. The Knight Center is well located within the central business district and within convenient walking of several major office buildings and other employment centers. Covered parking and with the main the enclosed "walkway connecting the parking garage retail core would enhance patronage. Aside from "the appeal of retail facilities themselves, it is likely • thatthe Knight Center in general, would be an attraction. Its setting ,, the Miami River, striking architecture and the activity asao- along ciated with the Hyatt Regency Hotel would be likely to draw both local residents and tourists to the Center. If the downtown people -mover is developed, the Center would enjoy the additional advantage of having a station location in the base of the park- ing garage. This would be a major stimulus for retail activity but is not essential in our judgement. mismaeosastivaromoornowspareserimmummingemataw r r r r r r r r r VI. RETAIL MARKET ANALYSIS have projected 95 percent for the retail space controlled by both the A rental rate of $15 per square foot per ye an occupancy level of the City. to r r r r r r r r r r • r r r r r r VII. PARKING GARAGE This chapter of our repo pected to patronize the parking garage, projections of anticipated use and an analysis of the rate structure utilized in our financial projections. The foflowing .sections 411cIss - the' pertinent characteristics of each market segment. „., SOURCES OF USE MonthlyContracts - These patrons include employees of the James L. Knight International Center and others working in the downtown area. MiiIIMMONMESIOOMINIMINKONIMNIMOSOMMINOMMOMMINION". r r r r r r r r r r r r VII. PARKING GARAGE �� 3 NP�✓�t�^� ic0 v �` ' �`� 5 ,c.1. \;0N II-2 01- ,,;fA.‘1r`6`� t is .prised of those guests who are utilizing privately Owned or rented automobiles during their stay at the. proposed hotel. Outside banquet - These users of parking facilities are of area residents attending banquets held in the Center. comprised Short-term weekday - Parkers visiting the hotel and convention center to`.conduct business, call on hotel guests, and patronize food and beverage facilities of the complex, exclusive of banquets, comprise this market segment. Short-term weekend - These parkers are similar to. those described in the preceding paragraph, except that the volumeof business callers is expected to be:considerably lower. Theatre patrons - Local attendees of theatre events Outside - other patrons This market segment is comprised of parties not associated with the hotel or convention center, but who patronize the park- ing garage due to its favorable location in the CBD. A feasibility report dated September 1978, covering the proposed parking garage has been prepared by Conrad Associates of Chicago, Illinois. II-3 r r ,r ,r r r VII. PARKING GARAGE formation utilization, V P V 9 �d�e� 1 �UL 31 �i.� Parking utilization poet ons esented her „mia:£'S�d On i contained in the Conra Rep gf%crrxr► bi ; n� ysi g 45.% sc 6bt 'NU "' c '' • �`�� :Nu. S,gLE ptE •vH � �v1C PROJECTED UTILIZATION market The following summarizes projected parkin segments previously identified. Mo nthl arrangements has Conrad Report. It utilization by those er contracts - Utilization derived from permanent parking been estimated at 200 contracts in accordance with the is expected to remain constant throughout the operating periods projected. hotel guests;- Parking facilities utilized by guests of the proposed hotel were based upon occupancy levels and market segmentations described in commercial guests parking facilities Chapter V of this report. Approximately 75 percent of the and 20 percent of all other guests are expected to require at the proposed garage. Outside banquet - Utilization of parking facilities emanating from banquet patrons was projected based upon banquet patronage described in Chapter IX of this report and the assumption that one parking space will be required for every two banquet attendees. 11=111.11....1.11.1111./.141e r r r r T. r P Ir r r r VII. PARKING GARAGE t\'A 0 30-. cc S ... c- F.* g,,C1 , `i.`4 ' Vi ‘Cre• -- 2---:C:' C-1\ :..7 C)(cige‘S es Al]. short-term and o tsidei -..tota0 )1atrons.,'‘-,g s of use i ' ' • ' '.. C Z: for these market segments are easeniialBy7bA. sAd4 it imum patronage pro- ..,-' ,\.c"c-• . , .- ,,t• jedted'by,the Conrad report, sub -ct t'o ization buildup factors of 80 ... , .. . .. percent, 90 percent and 100 percent in years 1982 through 1984, respectively. VII-4 Theatre Datrons - Parking utilization by this taarIcet segtrient was derived based upon the number of theatre events projected in Chapter IV of this report, and a maximtmt available supply of 645 parking spaces for these users due to utilization by other market segmettte. In recognition of the proposed concept of parking facilities, it is anticipated that characteristics of both private and municipal parking opera- tious will come to bear on the determination of the rate structure to be adopted by the proposed parking garage. Accordingly, parking rates have been projected to fall within the range of rates currently being charged by competitive facil- ities. These competitive ranges and the rate structure projected for the pro- posed facility are summarized as follows: amoutatatinitedeasexasorawiworsoaravommisomaimnipaummagewsranweessinummiouniwommum.... V11-5 VII. PARKING GARAGE • Monthly contracts Full day parking for hotel guests and outside - other patrons Short-term parking including outside banquet, short-term weekday, short-term weekend, and theatre patrons VIII. FINANCIAL ANALYS AND CONVENTION CEN p,t4P`'Cr4141 Exhibit VIII-1 on p geiga s:umm!:Ifojections of net operating income or loss f posedn City of Miami Civic and Conven- tion Center for the first ten full years of operation, assumed to commence on January 1, 1982. All projections reflect the effects of inflation at a rate of.7 percent compounded annually. These projections are based on the assumption that the facilities will be operated under competent management. The bases and assumptions for these projectiorts are explained in • the following sections of this chapter. Gc .GC' 41A�GL1,!, / S Alta:<t) ,�•St CASU V3 tireA`ah �t3p`lr`` p AFC 6 PE ' t)1 .•P�Fsc.. ' `h•t� F�ti P'��1E� F Rentals om eting rooms represent revenues derived from the 2.,,,„ Utilization of convention center facilities other than the theatre. According to proposed plans, the center facilities will include a total of'6,600 square feet of meeting rooms. Based upon rental charges of $.05 per square foot and we have projected $36,100 in revenues derived VIII. FINANCIAL ANALYSIS: CITY OF MIAMI CIVIC AND CONVENTION CENTER REVENUE lined on Table IV-8. W to' 2,700 for; ticketed pressed in 1979 dollars. in it';is assumed' that the Center have rentals are based upon projected theatre utilization as out- ' have projected an average attendance ranging from events with an average ticket price of $12.00, ex- accordance with practices of competitive facilities, will receive ten percent of the proceedsof ticket n-ticket events will pay a flat rental charge based on - facility needed. We have pro ected,the following room charges in 1979 dollars. viiI- 2 size of the Rental rate a rate a utilization rate of 30 percent $ 600 700 450 1,750 ri t 1 VIII. FINANCIAL ANALYSIS: CITY OF MIAMI CIVIC AND CONVENTION CENTER from the rental of these rooms (1979 dollars). .This amount was then adjusted for increased utilization and the effects of inflation. Miscellaneous income has been projected at 5 percen convention center revenues, and then adjusted OPERATING EXPENSES VS. • ' _ Marketing and promotion expeAgee s\QB vprran 10 St . 0.1-kNO %AV° ments between Miami Center Associa es issiCtik,iitiq4fplOrgetk or joint #.0t,,*„ • \N ' 11\1•• , Rt\j‘e. funding of promotional efforts by t e veloper. Insurance expense, including liability and property insurance, has been projected at $76,000 annually, expressed in 1979 dollars, based upon in- formation provided by Frank B. Hall insurance underwriters. This amount was then adjusted for the effects of inflation. Payroll and related expenses for the convention center were pro- jected on the basis of anticipated staffing requirements. Energy costs. repairs and maintenance. operating supplies and miscellaneous expenses were projected on the basis of amounts per square foot in accordance with the experience of similar civic and convention centers. V/II. FINANCIAL ANALYSIS: CITY OF MIAMI CIVIC AND CONVENTION CENTER viil-4 Telephone expenses were projected based upon information provided by • Southern Bell Telephone and Telegraph Company. • Management fees, were projected to be 10 percent of total revenue. Reserve for replacement is based upon a con ual �jit on as set forth in the lease agreement with Ni I S n 8 E 1' ~ 7f 11 1 , 8 is II Revenue: Rentals: Main theatre Meeting roods Other income: Total revenues Operating expenses: Marketing and promotion Payroll and related Energy costs Repairs and maintenance. Operating supplies Telephone Insurance Management fees Miscellaneous expense 1 / A 1111 Total expenses Cross operating loss Add hotel promotional contribution Deduct for replacement Net:lncome or (loss) I,1 1983 EXNIBIT VIIt-1, PROPOSED CITY OF NIAMI CIVIC AND CONVENTION CENTER PROJECTED STATEMENT OF INCOME AND EXPENSE 1982 1991 (Consideration given to the effects of inflation) 1984 1985 1986 737,600 $ 880,200 $ 1,037,600 $ 1,110,200 $ 1,188,000 44.300 57.800 74.400 79.400 85.200 938,000 1,112,000 1,189,600 1,273,200 1 362 500 59,500 63.300 1991 $ 1,271,200 $ 1,360,200 $ 1.455,400 - $ 1,557,300 $ 1,666,300 111.100 118.600 781,900 39100 821,000 46.300 984,900 200,000 214,000 316,100 338,200 138.700: 152.100 '55.500 63.800 44300 51,300 15,900 20,300 _93,100 99,600 82,100 98,500 45"_800 52.700 991,500 - $ 1,090.500 55.600 1,167,600 229.000 361,900 166,800 73,800 59.600 27,100 106,600 116,800 61.200 $ 1,202,800 105,600) ($ 1,249,100 245,000 387,200 178.500 79,000 63,800 32,900 114.100 124,700 65.500 $ 1,290,700 35.200) ($ 114.500 100.000 100.000 98,600) ($ 100.000 91.300 96.600 103.500 1,456,800 1,558,900 1,668,400 1,784,900 68.100 72.800 78_000 83.400 89.200 1,529,600 1,636,900 1,336,500 1,430,600 262,200 414,300 191,000 84,500 68,300 35,200 122,100 133,400 70.100 280,800 443,300 204,500 90,400 73,100 37,700 130,600 142,700 75.100 $ 1.381,100 ,$ 1,478,200 41.600) ($ 44,600) ($! 131100 100'.000 20,700) ($ 19.100)`($ 13.500) ($ The comments d are en tnte al one tht 300,100 474,300 218,800 96,700 78.200 40,300 139.700 152,400 80.200 $ 1,580,700 47,600)($ 140,300: 100.000 7.300) ($ 321.200 507,500 234,000 103,500 83.700 43,100 149,500 163,200 85.900 $ 1,691,600 51,100) ($ 150,100 100.000 — 1,000) $ • (dale) AS CF — Y FOR PhANAGEMEN TO 3E USED ONE � �. ENGAGEti1EN-1 IS pr, U';,St^'� Ptliic'0'E AFT IS SUBJECT TO IN: U�r.Pi.E tE: '; )I1S OR POSSIBLE REVISION rti;nl_ REI►E\.J AND PUSS 1,751,800 1,874,100 343,800 543,100 250,400 110,800 89.700 46,100 160,000 174,600 91.900 $ 1,810,400 367,800 581,000 267,900 118,400 95,900 49,300 171,200 186,800 98.300 $ 1,936,600 54,700) ($ 58,600) ($ 62,500) 160,600 171,800 183,800 100.000 - 100.000 100.000 $ 13,200 $ 21,300 5,900 IX. IX-1 `dust G tt.°1 MPNP GEMS I t5 3 REGENCY FOB.. Nt' �vS�E pN a • on page IX-10 pre�gti� of projected cash flow available for debt service, rent and t es ncome for the proposed Hyatt Regency Rotel for the first ten full years of operation, assumed to commence on January 1, 1982. A11 projections reflect the effects of inflation at a rate of 7 percent, compounded annually. PROPOSED The projections are based on the assumption that the hotel will be competent management and be properly promoted. basis and assumptions for these projections are explained in the IX. FINANCIAL ANALYSIS: PROPOSED HYATT REGENCY HOTEL ROOM DEPARTMENT Guest room sales were computed based on occupancy rates which reflect the results of the supply and demand analysis as presented in Chapter V of this on comparable facilities and our assessment of the projects strength in the market we have projected an average rate of $55 for all levels of occupancy expressed in 1979 dollars. The following table summarizes projected average room rates, occupancies and room sales at the proposed hotel, with consideration given inflation: Average Room Rate Inflated Dollars 1982 $ 67.38 1983 72.11 1984 77.17 1985 82.56 1986 88.33 1987 94.49 1988 101.09 1989 108 1990 115. 1991 123. Average Annual Occupancy (Rounded) 7 07. 75 80 85 85 23,3 JUL 19 �d�et R MANAGE-MEN" ANAGE ME 7 �5 7 S SSV FOC V. ENGAGE ECG TO G -� Uh, F r E•. Arlo PO$5 P� ` ICs -� aE� 1Ew the effects of Room Sales (Inflated and Rounded) $ 10,466,200 12,001,200 13,699,600 ,572,600 661,900 823,900 068,900 07,200 9,000 000 IX, FINANCIAL ANALYSIS: PROPOSED HYATT REGENCY HOTEL Rooms payroll and related expenses were computed on the staff requirements for the rooms department of a first-class luxury were projected to be 16 percent of room sales in 1982. adjusted for higher levels of occupancy ary trends.; and was then: inflation - Other expenses in the rooms department represent the cost of guest supplies, laundry, linen, keep of sales the guest rooms. dry cleaning and other items required for the expense was estimated to b 1982 and was then adjusted for var efficiency; and inflationary trends. FOOD AND 8!1 RAGE DEPARIMENT Food' and beverage department r projected guest counts and proposed facil food check expenditures were estimated by meal and guest type based on a pro- jection of current check averages at competitive facilities. Considered in our analysis were the following: culated based on emes and orientations. Average The proposed hotel's integration with the convention facilities can be expected to contribute substantially to demand for food and beverage demand, especially with respect to banquet services. PROJECTED FOOD SALES 1782 PROPOSED HYATT REGENCY (In 1979 Dollars) Number of Covers* In -House University groups of Miami Other. Banquets: Breakfast 39,600 29,790 69,390 $ 3.25 $ 225,000 Lunch 99,750 30,392 42,250 172,392 7.25 1,249,800 Dinner 37.125 23 714 22 750 83 589 1.6.00 1 337 400 Total. banquets MALI 83 896 65 000 325 371 8.64 2 812 700 AS CF 3 1 1972-_-_- _Kiwi; . TO ;-',F t_ED ONLY FOR MANAGEMENT [poif!:'":J Ft 113F•Ogio=i.K4.-AGEMENTA je Ilioviii F rE: THIS DlatIO .SUBJEC1 Vitd r17:1—r IN..IEW AND russiint REVISION ed les Restaurants: Breakfast Lunch Dinner Total Restaurants Totals 90,496 52,777 84 • 130 227 403 403,878 *A cover represents., one meal served. 20,040 19,500 130,036 10,325 72,020 135,122 21 790 61 100 167,020 52 155 152 620 136,051 217,620 5.50 715,200 4.75 641,800 14.00 2 338 300 432 178 8.55 3 695 300 $6,508,000 7 1111111111/11.111.111,1 1 r r 11! r ' . r r IX. FINANCIAL ANALYSIS: PROPOSED HYATT REGEN The facility's involvement is expected to result in an source of demand for food a Considering these factors plus the n-house guests and the local community, food sales f roposed hotel were pro- jected to be $6,508,000 in 1982, expressed in 1979 dollars, as summarized on the facing Page. Thus food sales were projected to be approximate/3r 76 Percent of room sales in 1982. Future years were then adjusted to account for increased occupancy, increasing demand from outside patrons and inflation. Aeveraae sales, were determined as a percentage of food sales and were projected to be 47 percent of total food sales in 1982. Total food and beverage sales were thus projected to equal 112 percent of room sales in 1982. Future years projections of beverage sales were also adjusted for anticipated increases in food sales and inflationary trends. The cost of food sales was computed on the basis of 35 percent food cost while the cost of beverage sales was projected to be 21 percent, based on costs experienced by similar hotels and our knowledge of the industry. These costs were then adjusted for increased operational efficiency and inflation. r r IX. FINANCIAL ANALYSIS: PROPOSED HYATT Payroll and related expens were projected to be`approximately 37 sales in the first full year of operat requirements f inflation proposed hotel. he od and blissalgotigthRen6 c C•F• �" ,��,AGF�Z 5 p 61[t�rtf eitt4 'fbe'd 44 b �' S Gu 5�6L on a<nd=a a bas,aettgn?9 o - ese saie3gn- increased operational efficiency. Other expenses, consist staffing ere then adjusted for paper; supplies, laundry, china, glassware, silverware, other supplies used in the operation of this department, and any guest entertainment. It was assumed that the Hyatt Hotel will not incur substantial guest entertainment expenses other than the cost of entertainment in the lounges. Other expenses were computed at 11 per- cent of food and beverage sales in 1982 and were then adjusted for inflation and increased operational efficiency. OTHER OPERATED DEPARTMENTS Telephone department revenues and expenses were computed as follows: ... Telephone sales were computed on the basis of $2.30 per occupied room in 1982, expressed in 1979 dollars. Vary- ing occupancy levels, market orientations and inflationary trends were also considered in projecting this revenue item. ... Cost of sales for the telephone department represents the cost of all local and long distance calls and any other charges to the hotel by the local utility. This expense item was projected to be 110 percent of tele- phone sales. ,r r r r r r r IX. FINANCIAL ANALYSIS: PROPOSED HYATT REGEN Payroll and related staff requirements of projected to be approx sales. These expenses operational efficiency. Other expenses, of this de items as telephone covers printed forms and equipmen to be 2.3 percent of teleph uch ctories, were estimated Concession revenue and expense pertains to food and beverage service by the hotel for events in the City's 5,000-seat theatre. ... Concession revenues are predicated on our projections of theatre attendance. Based upon competitive facili- ties in the area and our knowledge of the market, con- cession sales were projected to be $.17 per attendee, expressed in 1979 dollars. Cost of concession sales were also based upon competi- tive facilities in the area and were projected to be 40 percent of concession sales. ... Payroll and related expenses were based upon anticipated staff requirements of the concession department and were projected to be approximately 13 percent of concession sales. ... Other expenses, of this department consisting of such items as paper and cleaning supplies, utensils, uni- forms and other items, were projected to be 10 percent of sales. Minor operated departments net income representing net income from the hotel's other services such as guest laundry, valet and vending machine sales, was projected to be 1 percent of room sales at all levels of occupancy. r r IX. FINANCIAL ANALYSIS: PROPOSED HYATT REGENCY HOTEL Rentals and other income includes rental income from the 26,000 square feet of retail space operated by the hotel. A vacancy rate of 5 percent i and annual rental income of $15 per occupied square foot expressed in 197 1- lars were projected and then adjusted for infl UNDISTRIBUTED OPERATING EXPENSES Administrative and eneral e 11,s JULS,...1-1579date 10 BE. USED tlIANAGE.t*S.11 4'1.37-4TOSELL: EliGAGSMEN1 enly4,i.gtieF.f 010,FT IS SUBJEC1 tt4b7i. itaitciA casstEkLE RE‘ItS‘ON ... Payroll and related expenses were based on the adminis- trative and accounting office staff requirements. This expense category was projected to be $900 per available room and was then adjusted for inflation. Other expenses include such items as accounting and legal fees, credit card commissions, general in- surance, printing, stationery and postage, provi- sion for bad debts and base management fees of 3 per- cent of total sales including rental and concession income. These expenses were projected to be 6 percent of total sales and were then adjusted for inflation and increased operational efficiency. Marketing expenses were projected based on the following: ... Payroll and related expenses were based on staff re- quirements of similar hotels. These expenses were projected to be 1 percent of total sales at all levels of occupancy. Lt. FINANCIAL ANALYSIS: PROPOSED HYATT REGENCY HOTEL follows: Other expenses, including advertising and promotion, agency fees, entertainment, travel and similar ex- penses, were projected to be 3 percent of total sales at all levels of occupancy. Property operation. maintenance and enertty costs were developed as ... Payroll and related expenses were based on staff re- quirements for the repair, maintenance and upkeep of the facility. This expense item was to be $304,000 in 1982 expressed in 1979 dollars and was then adjusted for inflation. Other expenses, includes all electricity, fuel, water, waste removal, periodic preventative maintenance and repairs to mechanical equipment, painting and deco- rating, and grounds maintenance. We have projected energy costs to be $3.58 per occupied room,-wr in 1979 dollars. Other ex jected to be 2.5 per after adjusted to re facilities. FIXED CHARGES Contribution to Convention v � JUL S i 1979 AS Cr_RE USED r FOP, MANAGEMENT TO RE USED DULY r r - MEN' �S SICK .IR^OSE�: ENGAGE +`T TO Tj�4;U;>�.,.... P� k�F7 IS SUBJECT D Can i&A&i .s REVISION OSStBLE . " $100,000, the maximum amount stipulated by the terms and conditions of the lease agreement between Miami Center Associates and the City of Miami. The effects of inflation have been considered only in projections for 1983 and thereafter. r IX. FINANCIAL ANALYSIS: PROPOSED HYATT REGENCY HOTEL Property insurance was ba underwriters and was projected to b justed for the effects of inflation. e if on Real estate taxes are predi $26 million as provided by Miami factor and millage rates Cent 031a►t'19�9d ided insu1::ce then a _ ldatel JUL 811 �>5 CF r--- MANAGENtENi ►;�tp ONLY rOc TO �E��,c�tv ��' �:rU�:effala ate ��t6timeto1 At.FE�'i��'V AtvDrAssaon of 60 percentand .033086, respectively, were then applied to the estimated completed value resulting in projected real estate As this amount is based upon completed value in 1982, the effects of inflation were considered only in projections for 1983 and thereafter. The reserve for replacement of furniture. fixtures and eauipment has been projected in accordance with the terms of the agreements between Miami Center Associates, Hyatt Hotels Corporation, and the City of Miami. These agreements require that a minimum of $27 per available room be reserved monthly for replacement of furniture, fixtures and equipment. The result- ing $197,000 projected for the reserve for replacements was then adjusted for inflation. Incentive management fees were based upon the contractual provisions f the management agreement between Miami Center Associates and Hyatt Hotels Corporation. The management incentive was computed to be 20 percent of a contractually defined operating profit less the base management fee already included in other administrative and general expenses. The resultant pro- jections were then adjusted for the effects of inflation. • —771/ Statistics:. Occupancy percentage (rounded) Number of occupied rooms per year Average room rate (Inflated) Revenues: Rooms Food and b ge Telephone Concessions Minor operated departments(net) Rental Income Total revenues Departmental expenses: Rooms Food and b ge Telephone Concessions Total departmental expenses - Departmental profit Undistributed operating expenses: Administrative and general Marketing Property operation, maintenance and' energy costs Total undistributed operating expense Gross operating profit Fixed charges: Contribution to convention center promotion Insurance Real estate taxes Reserve for replacement Total fixed charges Cash flow available for incentive management fee Incentive management fee Cash flow available for debt service; rent and taxes on Income -70% 155:341 $67.38 EXHIBIT 1X-1 PROPOSED IIYATT REGENCY HOTEL JAMES L. KNIGHT INTERNATIONAL CENTER 608 R00M5 PROJECTED STATEMENT OF CASH FLON'AVAILABLE SERVICE, RENT'AND TAXES ON INCOME 1982-1991 (Conslderatfon given to the effects of.lnflat 1985 1986 75%,' 166;440 • $72.11 807. 177,536 $77.17 85% 188,632 $82.56 85% ' 188,632 $88.33 ^J nF Al pvco r r<3 n.r' Fr - .'jr-OS ti�vAc;tnl (11a1R, 7 R��I..,V .rr,, 4R,4r £JVG4 raOtr 1987 ' 88 4IV j.Qe9 T t Rs 199 g57. r . 'BLF R4r- J CT Tp e 168,632 18' sa6:60 51 11i 85'b 188,632 188, $101.09 510,466,200 02,001,200- ,513,699,600 515,572.600 516,661,900, $17,823.900 $19,068.900 11,719,300 13611,700 15,772,100 18,207,400 19.481,100' 20,839,700 22,295,300 437,700 501,900 572,800 651,300 696,800 745,400 797,500 137,400 154,300 173,600 195,300 219,000 234,300 250,700 104,600 120,000 136,900 155,700 166,500 178,200 190,600 453,900 485,700 519.800 556,100 595,000 636,500 681,000 23,319.100 26,874.800 30,874,800 35,338.400 37,820,300 40,458,000 43.284.000 46.321.900 49.571.800 53.033.400 $108.19 632 ' .86 $20.407,200 521,839,000 523,364,000 23,860.100 25,534.100 27,317,200 853,500 913,400 977,100 268,300 287,100 307,200 204.000 218,300 233,500 728.800 _ 779 900 834.400 2,879,900 3,233,300 3,609,400 9,259,300 10,64I,900 12,205,800 596.300 675,800 763,400 86.600 97.300 109.500 12,822,100 14.699.300 16.688,100 10,497,000 12,225.500 14.186,700 3,907,300 13,994,100 859,900 123,000 18,884.300 16,454.100 4,185,400 14,973,100 920,100 137.900 20.216.500 17.603.800 2,147,700 2,396,400 2 669 200 2,983.000 3.191,800 908,100 1,030.000.' 4,477,300 16.017.300 984,300 147.500 21,626.400 18.831,600> 4,790,000 5,126,200 5,485,900 17.136.000 18,338,700 19,625,400 1,053.000 1,126,900 1,206,000 157,900 169,000 180.800 23.136,900 24 760.800 26.498 100 20.147.100 21.561.100 23.073.700 5,869,000 20,995,800 1,290,200 193.500 28.348.500 24.684.900 3.414.400 3,652.900 3,909.200 4,183.500 4,475,600 1.165,000 1.315.700 1,407,800 1,506,000 1,611.200 1,724,300 1,845.300 1,974.100 1,668.300 1,911,600` 2,186.500 4,724.100 5,338,000 6.020..200 5.772,900 6.887.500 8,166,000 100,000 83,300 516,100 241.300 107,000 89.100 552.200 258.300 114.500 95,400 590.900 276,400 2,495,400 2,706,900 2.895,700 3,098.000 3,315,400 3,548.000 3.795.800 6,794.100 7,306,500 7.816,100 8,362.100 8.948.900 9,576.800 10,245.500 9.660,000 10,297,300 11,015.500 11,785.000 12,612.200 13.496,900 14.439.400 122.500 102.100 632,200 295.700 131,100 109.200 676.600 316.400 140,300 116.800 724.100 338,400 940.700 1,006,600 1,077,000 1,152,500 1.233.300 1,319,600 4.832.200 5.880,900 7,089,000 398700 522.400 667,400 8.507,500 9.064,000 9,695,900 842.500 894.500 956.900 150,100 160,600 125,000 133,800 774,700 828.900 362.100 387_500 171,800 143.100 886,700 414.700 183,800 153,100 948,600 443.600 1,411.900 1,510,800 1.616.300 1729.100 10.373,100 1.023.800 $ 4.433.500 $ 5,358.500 $ 6,421.600 $ 7,665,000 $ 8.169,500 $ 8,739,000 $ 9,349,300 11.101,400 1.095.600 11,880,600 1.172 500 12.710.300 1.254.400 $10.005,800 $10.708,100 511.455.900 The comments and assumptions contained In this report are an integral part of this projected statement. emp III 1 NIIINIII Ili 11111111111111 FINANC L ANALYSIS: PARKING Exhibit X-1 on page X-4 pre ry of projectionS of income and expenses for the proposed parking garage for the first ten full years of operation, assumed to commence on January 1, 1982. All projections reflect the effects on in- flation at a rate of 7 percent, compounded annually. These projections are based on the assumption that the facilities will be operated under competent management and be properly promoted. The bases and assumptions for these projections are explained in the following sections of this chapter.; 11 . FINANCIAL ANALYSIS: P NG GA REVENUES 111.11.1111111111.wwwwwww...... c:),.. .•,..,-, • ,.,..?....1. ,..*. R.. .0'.....t'S . .......":•• ••-" , 90' .NSW elr .0" ..4.;•••••:. " ...."; \ . '''' .. mS, l' *. Ts .7 ParkinAmarame revenues are bas d uptilf:prplewieu , zation of garage kk \fv:g.'•• ?,.i.N. . . ' . A space and the projected parking rates disc seet pter VII. , .. -. ... ..,,,,...„....„..,... „,..,...,,„. . Rental income ..is'::::CompriSed,•..Of the income derived from the...:renti.1-•.of, , :. .:••. ,,...,.., ........,,,-..,.... i._:,--.. . , .• ,..,..,..,..:.,-............,.....,--,,....,....-........ ..... . ...,„ . . ........ . . .. „„. . 14, 000 square feet of • retail-. SpaCe..:•in--:.the. walkway connecting ;:the'-:-.• garage -;,With:: the . .. .... „. ....„ .. -,..:....,..................,..„..„...,.......,. ...„., ..,.,....„,..,...,.._..,,..„..,...,„...........„.......,....,,,......,,,,..-....,.:.•,..,... ,;•-..„-.,....,..,:,.-,:.:-.,.--...,-,..,.i.,...,....•.:•:,,,,.-,,:.,,•-..:,...•,.•....---...,....-,--.:.„,•.•.,. .. .......,.:,....:,..k.,...,,..,,,,,7,.-.,-,.....-.„,..,..,..„..,,,..:,..:.....,„:....,:, .:,....,..„...,...,..,....,.,„., .. .. „ „„,...,.................,.. ...,.... ...................... .....,.......,.„„,„„..,, projected.„,......,..........„......,,,....,.....,.,.,,....,,,,........,.....,,,. mainbuilding and was . ::-..,prOj:'H.On,••-•:thebasis •--.-- 4f:...,95...--..Perteht•.:•'OCOUtiahoY.;:':et-.':::e:.:,i0.;e of „.... .......,... .•.......:•......• ....,,.,•......•...... -- • „ -..,....•::::-,,,...--,,•..,-;,...,„•,-,...„...•..-..:.,......•,-.,.-...-,......,...,,-,,..H. ..... • ..--„-..-......--...•.• ..,..„ ......:.. -...,:.„...,,..„._,..,..„,:...:,,,,H...„.;,..,„..„.,..,....,.:;.;....::..,,H,..„.......,..,.......,,,.H,:„.,,:,,..::,:r.....„.. $15 per occupied square Loot tS::.presented.i;in.-Chapter VI..,„.. • : :,..::. ...,:„...,..,....,..:.,,„...,,,..,. ... „,,......,..:,, , : „....;,., • - •• • • :- •••....-.-.•::.-:,:,•.•: -..,.......',..:....,..:,-...•;.,..::.•.••....f...-- .. -...-••...-.-.-.•-•.:.'.-...-:-...•'.....,„::-...-::,•........-:-..„.:„•...-..-.....• ...-.,•,„•-...,...,.,.-:..,„......:.-.-.„.....-:........-.., . - -. . - ' -- — -- • - - •••• ------• -- - •••• ••• - • - .•-• • • -.--.--.........-.. „ „ ...„ ..:. ..„ . .....,... ., OPERATING EXPENSES With the exception of insurance expenses, the projected operating ex- penses presented herein are those prepared by Conrad Associates in their feasibili- ty report of September 1978. These expenses represent the following ratios of parking garage revenue, exclusive of income derived from the rental of retail space: r Expense Percentage of total revenue 9.5% 2.4 X, FINANCIAL ANALYSIS: PARKING GARAGE Insurance eau:tense, including liability and property projected' On the basis of inforMation.*OPlied by in X-3 -ri andlIMMI 777711 77,711 l : _tl l —,--1 Revenues•. Perking, Retail Expenses: insurance'`. Peyrol1 Payroll celatedexpenses Utilities Miscellaneous, exp. Net lncowe_' 1982- $ :931,500. ` 244.400 (Co EXHIBIT X-1 JAPES L. KNIGHT INTERNATIONAL CENTER PROPOSED PARKING GARAGE. PROJECTED STATEMENT OF INCOME AND EXPEN 1982-1991 nsidera[lon given to. the effects of HA 1983 1984 $ 1.058',400. $ 1,200,500 261.500 1.175.900 '' 1.319.900 24.500 112;200 : 28.100 ' :. 39,200 `123000 327.000 _' 848.900 The `comments 26,200 120,100 30,000r:_ 42,000 131.600 949.90° 279 900 1.480.400 s28,100;` 128,500 32,100 44,900 140900_ 374.500 970,000`''.$ 1;105,900: and'ussoUpttons 1985 $ 1.335,600 299.400 1.635.000 30.000 137.500 . 34,400' 48,000 150-700 1986 A !. CC ' 4, attonfl.%i[ c , ' cti� 1tiJli/EN7 R�r 1iti�fZ DRAFT `ESUB EC � 1988 REVIS $ 1,453.100 320.400 1,773 500 400,600 ... 1,234400 $ 32,100 147.100 36,800 51,400 161200:,- 428.6u" 'I 1987 1,344.900. contained En,thta report. are an $ 1,554,400 343.800: 1.898.200 34,400 157,400 39.300 55.000 172.700 r 458.800 $ 1.439.400 integral part $ 1,663,000 366.700; $ 1,779.700 392,500 $ 1,904,700 419.900 2.029 700 ;.` 2472.200 2.324.600 36,800 168;400 42.100,' 58,800 184.500, 39,300 180,200 45.000 $2,900 197.600 490:600 525 $ 1,539,100 42,100 192,800 48,200 67,400 211.300 000 - $ 1,647;200 E this projected statement- 561 800 1991 $ 2,037,600 449.300 2.486,900 45.000 206,300 51,600 72,100 226.100 601.100 $ 1,762',800 $ 1,885,800 Exhibit XI-2 (page XI-3) presents =ry of projected income' • to the Enterprise Fund for the ten-year period commencing on January 1, 1982, which would be available to repay the Lease Revenue Notes issued by the City. Income derived from the City of Miami Civic and Convention Center and the parking garage are as presented on Exhibits VIII-1 (page VIII-5) and X-1 (page X-4), respectively. Income derived from other sources is as follows: Hotel rent is based upon the terms set forth in the lease agreement between the City and the Developer calling for the rental amount to be the greatest of three alternatives as outlined in Chapter I. Based upon our projections of gross operating income for the Hotel the greatest amount for all ten years -would be that determined, based upon 20 percent of hotel gross Lees deductions: Contribution to convention center promotion Real estate and personal property taxes Insurance Reserve for replace- ment Hotel debt service and priority return to equity investors Participation interest expense Total deductions Profit base for rental calculation Rent (20 percent of profit base) 516100_ 83,300 241,300'. EXHIBIT•"XI-1` / PROJECTED RENT'PAID BY 11YATT REGEN JAIIES -L. "=IQlIGIIT• .INTERNATIONAL CENTER. 1982=1991 -1987 1988 S11 785000 $12 612,200 660.000-;'S1p 297 300'" Sll 00 552,200 ' 590,900 " '89,100, " 95,400 258,300 '276,400 295,700;" 2,979,200 2,979,200 2,979,200 196800 %;2_ 24200 , 632,200 676,600; 102,100' 109,200 150.900 172'700 • 11 702 00 2 729 000 3 912,300' $ 340,400 $ 545,800 $ 782,500 $ 1,060,800 $ 1,169,000$ 1,242,00074 1,423,90 _-__- 160,600 774,700. 828,900: 125,000 133,800':` 362,100" 387,500 ,400 22 256 500 .` 74 171,800 1991 439 400 183,800 886,700 948,600 143;100 153,100 414,700 314'300.:_ «r:ann .;`..4' 665,500; 4'7 •4 9p9800;: 8 587100 7.119.500 . 7 8�28500 3 The comments and assumptions this projected ataten-entort are an integral p 443,600 2,979,200 336,200 5 044.500. 9 394`,900 :1,879,000": 11 r r XI. FINANCIAL ANALYSIS: ENTERPRISE FUND operating profit after additonal specified deduction. 1CI-2 Eadlibit XI-1, opposite, presents a summary of the cal.culittiotl of rent based on this formula. • The bases for the amounts projected for Hotel Debt Service and Priority Return to Investors, and Participation Interest Expense are as follows. The bases for all other deductions are explained in Chapter IX: Hotel Debt Service and Priority Return to Equity Investors is. based upon the amount of $4,900 per hotel guest roam (608) as' stipulated in the lease agreement between the City and the Developer. Participation Interest Expense, represents additional interest expense paid by the Developer to the Massachusetts Mutual Life Insurance Company, the mortgagor, in the amount of 1-1/2 percent of annual room sales net of travel agents' commissions and cam - missions paid to the University of Miami. Other income to the Enterprise Fund consists of an annual by the Developer of $40,000, less $1.53 per square foot for t square footage of retail space in the Hotel which was year. • -; • • -• • • • • • • • • •-• • • • • . . ant o e the • Net. income; City of Hiasmi` Civic, and 'Convention Center Net income.parking garage EXHIBIT XI-2 JANES'L. KNIGHT INTERNATIONAL CENTER PROJECTED NET INCOME - ENTERPRISE FUND,: 1982-1991 Consideration Given to Effects of Inflation) 38 38 000 ,905,700 $2,314,100 • $2,538,400-: �datel S` 3 r NpGE'•`At P11 •5 �E. �s u j ;; s N .C`�0t:S).•�,a`a1s OK^FS►ISLE fiv+s,o . tt�• R�v1� ``N�pL 38':000 z ,38.000 The comments andassumptions contained in this report, are an integral part;:: ofthis; projected statement:': 1989 1990 1991 $1,717,400 $1,879,000 13,200 21,300 1,762800 1,885,800 38.000 $3,531,400 $3,824,100 LEASE AND AGREEMENT FOR DEVELOPMENT BETWEEN THE CITY OF MIAMI, a Municipal Corporation Under the Laws of the State of Florida MIAMI CENTER ASSOCIATES, LTD. A Florida Limited Partnership DATED lSe0J1Ea Ai Ai, /feAr,eiego 7n 7W �j0,44/42064' Section' 1. DEFINITIONS 1.1 LEASE AND AGREEMENT FOR DEVELOPMENT BETWEEN THE CITY OF MIAMI AND MIAMI CENTER ASSOCIATES, LTD: Additional Hotel Spaces 1.2 Air Space 1.3 Bonds or Revenue Bonds 1.4 Conference Center 1.5 Convention Center 1.6 Demised Premises 1.7 Easements 1.8 Excepted Premises 1.9 First Opens for Business 1.10 Hotel 1.11 Hotel Tower 1.12 Swimming Pool, 1.13 Lease 1;.14 Parking .Garage 1.15 Premises' 1.16 Project age 2. LEASE TERN 2.1 Initial Term 3. Additional Rent Rent Days Payment of Additional Right to Audit 3.6 Offset INCREMENTAL COSTS CONSTRUCTION OF THE HOTEL 5.1 '` Developer's Obligation to Construct the Hotel Submission of Design Development Plans Approval of Design Development Plans by the City 5.4 Submission of Final Development Plans Approval of Final Development Plans Scope of Review by City 5.7 Substantive Changes In Plans .8 Contract for Construction 5.9 Conditions Precedent to Commencement Construction 5.10 Access to Premises 5.11 Permits and Licenses 5.12 Progress Reports ii 5.1.3 Payment of Contractors and Suppliers 5.14 Mechanics' and Materialmen's Liens 6. CONSTRUCTION OF THE CONVENTION CENTER 6.1 Construction of the Convention Center 7. 9.1 6,2 63 Additional Improvements by the City: Time for Performance by City 6.4 Commencement of Construction UTILITY SERVICE 7.1 Hot and Chilled Water 7.2 Location and Quantity of Utility Service 7.3 Agreement to Purchase and Sell 7.4 Cost of Utility Services 7.5 Interruption in Utility Service 7.6 Utilities CONVENTION CENTER FACILITIES 8.1 Obligation of the City 8.2 Pre -Opening 8.3 Use of Facilities .5' Maintenance of Convention Center Obligation of City to Reconstruc Convention Center .6 Management of Convention 8.7 Center Coordination of Maintenance and Repairs PARKING Construction of Parking Facilities 9.2 Use of Parking Facilities by Developer Approval of Plans by Developer and Time to Complete Parking Facilities 9.3 18 8 19 2 0 20'. 2 21 22:.. 2,. w/ 9,4 Additional Parking Facilities 9.5 Maintenance of Parking Facilities 9.6 Obligation of City to Reconstruct Parking Facilities 10. HOTEL MANAGEMENT 10.1 Contract with Hotel Manager 10.2 Operation of First -Class Hotel Commissions and Discounts. Right of Inspection 11. EQUITY INVESTMENT CAPITAL AND MORTGAGE FINANCING 11.1 Sufficient Funds to Construct Improvements 11.2 Developer to Furnish Name and Address o Mortgagee 11.3 Developer to Notify City of Other Encumbrances 11.4 Rights and Duties of Mortgagee (a) Notice of the Developer's Default (b) Right of City to Complete (c) The Mortgagee's Rights Prior to Completion. of Improvements (d) The Mortgagee's Rights After Completion, of Improvements (e) Right of Mortgagee to Transfer and Assign (f) Copy of Notice of Breach of Covenant or Defaul t Right of Mortgagee to Cure a Breach of Covenant or Default by the Developer (h) Additional Rights of a Mortgagee Upon the Developer's Default 11.5 Obligations of Persons, including a Mortagee, Acquiring the Leasehold Estate in the Demised Premises iv 12. 13. 14. 11.6 Assignment by Mortgagee 32 11.7 Mortgagee's Right to a New`Lease 32; 11.8 Limited Liability 11.9 Amendments Subject to Consen RESTRICTIONS ON USE 12.1 Authorized Uses 12.2 Gaming 12.3 Limitation on Retain Sub -tenants PUBLIC CHARGES 13.1 Covenant for Payment of Public Charges 13.2 Evidence of Paymentof Public Charges 13.3 Payment of Public Charges by City INDEMNIFICATION AND INSURANCE 14.1 (a) Indemnification by Developer Indemnification by the City 14.2' Types of Insurance to be Carried by Developer Property Coverage During Construction Period Property Coverage After Construction Period (c) Comprehensive General Public Liability Coverage During Construction Period (d) Comprehensive General Public Liability Coverage After Construction Period (e) Comprehensive Automobile Liability Coverage (f) Workmen's Compensation Coverage .(g) Business Interruption and Other Insurance (h) Limited Release of Liability and Waiver.. of Subrogation (b) (a) (b) v 3 35 6 3 3 37 38 3 4 43 15. 14.3 Non -Cancellation Clause 14.4 Certificate of Insurance 14.5 _ Right of City to Obtain Insurance 14.o 'Non -Waiver of Developer's Obligations 14.7 Mutuality of Insurance Obligation 14.8 Reasonable Deductible 14.9 Insurance Carriers; Mandatory Coverage, MAJNTENANCE, REPAIR AND REPLACEMENT 15.1 Maintenance and .Repairs I5 2 Reserve for Replacements 1.5.3 Waste; 15.4'` Alterations of Improvements' 16. FIR: OR OTHER CASUALTY ",ny Loss; or Damage 16.1 1. Partial Loss or Damage Not to Terminate Rent or Agreement 16.3 Extensive Loss or Damage Rendering Improvements Unusable for Hotel Purposes (a) Suspense Account for Insurance Proceeds (b) Disposition of Proceeds of Insurance Not Used for Repair or Reconstruction 17. CONDEMNATION 6.2 1 Adjustments of Rent (a) If Entire Project is Taken (b) If Part of Project is Taken 17.2 Proration of Condemnation Awards 17.3 Condemnation by the City 18. DEFAULT - TERMINATION 7.1 vi 44 4 4 4 19. 20. 18.1 Default by the Developer 50 18.2 . Default by City 52. 18.3 Obligations. Rights and Remedies Cumulative 53 18.4 Non -Action on Failure to. observe Provisions 3 of this Lease 18.5 Non -Performance Due to Causes Beyond Control 53 of Parties 18.6 Surrender of Demised Premises 54 18.7 Ownership of Improvements;, 54 18.8 Party in Position of Surety with Respect to Obligations QUIET ENJOYMENT 55 MISCELLANEOUS 55 20.1 Non -Discrimination 55. 20.2 Equal Opportunity Provision 20.3 Certification of Nonsegregated Facilities 20.4 Internal Revenue Code Compliance 20.5 Participation in Civic Functions at Convention Center 20.6 Assignment by Developer 20.7 Notices 208Provisions of Law Deemed Included' 209 Invalid Provisions 20.10 Applicable Law and Construction 20.11 Amendments 20.12 Gender and Number 20.13 Award of Contract 20.14 Public Park and River Walk 20.15 Development of Patricia Hotel Site vii 4 8 20.16 Approval of Universityis Agreement by' Developer 20,17 Use of University Space 20.18 Estoppel Certificates 20.19 Clarification of Intent 20.20 Date of Effectiveness of Lease. 20.21 Effect of Failure to Validate Bonds viii re LEASE AND AGREEMENT FOR DEVELOPMENT made and entered into at Miami, Florida as of this 28th day of August 1979, by and between THE CITY OF MIAMI a municipal corporation under the laws of the State of Florida (hereinafter referred to as the "City"), and MIAMI CENTER ASSOCIATES, LTD., Florida limited partnership and its successors and assigns (hereinafter referred to as the "Developer"); W `' I T'N E S "`S E' T��„H adopted by the City Commission on July 1, 1964, and the approval of the voters of the City at an election held September 29, 1964, the bonds of the City in the principal amount of $4,500,000 were sold and delivered by the City on May 6, 1969, and the proceeds of such bonds, with other funds, have been or shall be applied to the payment of the cost of constructing a convention center for the City, including parking facilities, appurtenances, land and equipment and any necessary clearing, filling in, extending, enlarging or improving the site therefor; and WHEREAS, the City to enhance the success of the convention center entered into an agreement dated April 1, 1977 with the University of Miami, a non-profit corporation organized and existing under the laws of the State of Florida (hereinafter referred to as the "University") wherein the University agreed to lease and operate a conference center as a part of the convention center (said Conference center being herein designated the "Conference Center" and said convention center and conference center, collectively, being designated "City of Tr- •: Miami/University of Miami James L.'Knight International Center" and herein called the "Convention Center"); and WHEREAS, said agreement provides that the Unfversity,shall 'make available $2,500,000 with certain earnings thereon, to the City as advance rent for the Conference Center on the condition that the City cause to be constructed a luxury hotel of not less than 250 rooms and a parking garage of approximately 1,000 car capacity to be operated as part of the Convention Center; and WHEREAS, the City on February 16, 1977, by published notice, invited expressions of interest from developers in the development and operation of commercial facilities essential for the Center and, pursuant to such invitation, proposal to the City; and WHEREAS, the Commission of successful operation of the Convention he Developer submitted its development'` January 24, 1978, authorized the City Manager to execute contracts with Developer for the development of such commerical facilities; and WHEREAS, pursuant to the authorization of the Commission of the City, the: appropriate officers of the City have worked with the representatives of the Developer in the preparation of this Lease which provides for the leasing by the City to the Developer of the air rights over a portion of the area comprising the Convention Center for the construction and operation by the Developer of a hotel and other amenities, the leasing by the City to the Developer of certain spaces within the Convention Center for'the purposes of the Developer and the granting by the City to the Developer of essential easementsand other rights necessary for or incidental to the construction, operation and maintenance of the hotel; and WHEREAS, the City has by resolution authorized the financing of the cost of constructing the Convention Center and a parking garage (herein called the "Parking Garage") through the issuance of its revenue bonds (hereinafter sometimes called the "Bonds"), -2 NOW, THEREFORE, in consideration of the convenants herein contained and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowedged, the City hereby leases to the Developer,and the Developer hereby rents from City, at the rent and upon the covenants, conditions, limitations and agreements herein contained, for the term hereinafter specified, the Demised Premises and the parties mutually Section 1. DEFINITIONS. The covenant and agree as follows: terms defined in this Section except as herein otherwise expressly provided or required by the context) shall for all purposes have the following meanings: "Additional Hotel Spaces" shall mean Shell Spaces in the Convention Center as delineated in Exhibit "Bs and designated Space Nos. "Air Space" shall mean all that air space delineated in Exhibit "A" designated "Swimming Pool", and all that air space bounded as follows: as shown elevation as shall Tower' projected' vertically to intersect the upper and lower boundaries. lower boundary - the horizontal plane at elevation 81' attached hereto and made a part hereof; upper boundary - the horizontal plane at the maximum perimetrical boundaries - theperimetricalboundaries the space delineated in Exhibit "A" and designated "Hotel 1.3 "Bonds" or "Revenue Bonds", except where language clearly indicates a different meaning, shall mean the revenue bonds of the City to be issued to finance the Convention Center and the Parking Garage. 1.4 "Conference Center" shall mean that portion of the Convention Center which is to be leased by the City to the University. 1.5 "Convention Center" shall mean the entire four-story structure to be constructed by the City on the land described in Exhibit "A" appended hereto -4- and by reference made a part hereof which includes ;the Convention Center space, Conference Center space and Additional Hotel Spaces. "Demised Premises" shall mean the Air Space, the; Additional Hotel Spaces and the Easements. 17"Easements" shall mean (a) use in common with the City and all others of all public sidewalks, streets,. avenues, curbs and roadways fronting on and abutting the egress and passageway in through and, across the Excepted Premises which shall be necessary or desirable it.il` entrace, exit and passageway to and from the Hotel for the use in common of e Developer, their respective successors, assigns, patrons, tenants, invitees and all other persons having business with any of them; (c) the right of support and right of user in respect of, and to maintain within the Excepted Premises, all essential structural support elements, all sump systems for flood water control, all fire stand pipes, public fire exits and fire control systems; all gas, electric, telephone and water utility lines, pipes, and conduits; all elevator apparatus and elevator banks; -11 gas, electric,, and water meters and meter rooms; all heating, ventilating and air-conditioning systems and machinery pertaining to and needed to support and operate the Hotel as a first-class hotel; and the mutual right of access for the use, in common, of the City and the Developer to inspect, maintain, repair, columns, supports, foundations, drains, utility lines, elevator shafts and pits dnd other improvements and facilities; either in .:the Demised or Excepted Premises. -4- renew and replace such %J "A" and all 1.8 "Excepted Premises" Shall mean the land described in Exhibit improvements thereon, as shown.in Exhibit "Bs', not expressly included in the Demised Premises. 1.9 "First Opens for Business shall mean that date on which the Developer first receives income for use of the Hotel by the'public 1.�10 "Hotel" shall mean the Hotel Tower and'Swimming Pool to be and the Additional Hotel Spaces which are to be provided by the Developer completed by the Developer. The term "Hotel" includes and equipment to be provided by the Developer. completed by the Developer. 1.11 "Hotel Tower: shall mean the Developer in the air spaces described in Section be provided by the City at elevation 81'6". by the Pool"` furniture, fixtures in the premises constructed or the structure to be constructed by. uponthe platform to 1.12 'Swimming Pool" shall mean the swimming pool to be. constructed Developer in that air space delineated in Exhibit "A" designated "Swimming. 113 "Lease" shall mean this Lease and Agreement for Development between the City and the Developer dated as of the 28th day of August 1979 including any and all amendments hereafter made thereto pursuant to this lease and agreement. "Parking Garage" shall mean the parking garage that shall constructed and operated as provided in Section 9, of this lease. 1.15 "Premises" shall mean the Demised Premises and the Excepted 1.16 "Project" shall mean the Convention Center, the Hotel and the Parking together with a walkway, appurtenances, improved and approved land, landscaping and all furniture, fixtures and equipment thereto. -5- "Shell Spaces" shall mean those unfinished areas of th nonvention;Center to be completed, furnished, fixtured and equipped at the expense of the Developer comprising the Additional Hotel Spaces. 52ction.2. LEASE TERM. Initial Term. The initial term (herein called "Initial Term" of this Lease shall commence on the date hereof and end forty five the date on which the Hotel First Opens for Business. The parties years will after execute in recordable form a memorandum evidencing the date on which the Hotel firstopens for business within 30 days after such date. Renewal Term. This Lease" may be renewed, Upon the same terms for an .additional forty-five (45) years and conditions as contained herein, after the expiration of the Initial Term hereof, provided the Developer is not then in default, upon written notice by the Developer delivered to the City at least 180 days prior to the termination following"conditions: of the Initial Term and subject to the (a) In consideration of such renewal of this Lease, the r weloper agrees to negotiate with the City the rents, and extensively refurbish, adate, and modernize the fixtures, furnishing and equipment of the Hotel within one year after the commencement of such renewal term or show evidence that the Developer has done same before the commencement of such renewal term. (b) If refinancing of the Hotel is required for purposes of refurbishing as required in paragraph (a) above, the City and the Developer shall"renegotiate the rent provisions of this Lease. 2.3 Lease Term. The Initial Term and Renewal Term are _herein' collectively referred to as the "Lease Term". Section"3. RENT, Rent for and during the Initial' Term shall consist :of"Base Rent" ,nd Additional Rent payable as herein provided. -6- 3,1 Base Rent. (a) Base Rent shall be equal to the present value of all of the rights of the Developer under this Lease(exclusiveof the Renewal Terri .set out in Section 2.2) to be determined by appraisal -of two independent, fully, of April 20,1978 and qualified appraisers. Present value shall be determine by agreement shall not be less than $1,750,000.' The Developer shall pay to the';' City Base Rent in advance on the date the Hotel First Opens For Business, provided however, that if the Base Rent, computed as determined in Section 3.1(a) exceeds $1,750,000, $1,750,000 shall be payable on said date and the excess amount shall be paid in 90 equal semi-annual installments including interest at 10% per annum on unpaid balances remaining from time to time due and payable on the dates provided for in Section 3.3 for the payment of Additional Rent. (c) The deferred portion of Base Rent at the election of the Developer may be prepaid in whole or part at any time without penalty or premium. 3.2 Additional Rent. (a) In addition to the Base Rent, the Developer shall pay to the City Additional Rent based upon Gross Sales computed as follows: Additi Additional Rent as a Percentage of Gross Sales If Gross Sales exceed $50,000000 the Developer shall pay to the, City oral Rent in the amount of $1,500,000 subject to upward' adjustment for -7- 1 equivalent increases in the Consumer Price Index for the City of Miami, or such other comparable index which may be in effect from time to time if said Consumer Price Index is unavailable, using the index for the first year in which Gross Sales exceed $50,000,000 as a base year. on an annual basis, gross room rentals, charges or other revenue gross food and beverages sales or services, therefrom and Excluded from Gross Sales shall be commissions paid on room rentals at a rate normally paid in the operation of a first-class hotel. ach semi-annual payment of Additional computed on estimates of annual Gross Sales determined by Developer (with the final sum determined in accordance with Section 3.4) less the amount of Base Rent paid the City pursuant to Section 3.1(b) for the applicable period. Payment of Additional Rent shall be deferred if there are no funds available to the Developer after the payment of principal, interest and participation interest under the Developer's first mortgage, provided, the payment of Additional Rent shall not e deferred in excess of the payment of principal, interest, and participation interest required under the Developer's first mortgage loan effective on the date the Hotel First Opens for Business. That portion of the deferred Additional Rent shall accrue with interest equal to 1/2% above the rate paid by -8- e City on its Revenue Bonds issued in connection the construction of the Convention Center The, aggregate amount of such of *unpaid Additional Rent shall be due nd payable by the Developer to the City at the end f each tenth (loth) year and at the end of the after the Hotel First Opens further, provided, that if funds available to the Developer afterpayment` of principal, interest, and participation interest on Developer's first mortgage and there exists unpaid accrued Additional Rent for any prior year or such funds available shall be appied to the payment of said unpaid accrued Additional Rent. 3.3 Rent Days. Additional Rent shall be payable in arrears on each date which is 30 days prior to each semi-annual interest payment date of the City's revenue bonds, which rent shall be applied to the semi-annual period immediately preceeding payment (subject to proration for the initial and final rent periods). The dates thus fixed shall continue as Rent Days after retirement of the City's revenue bonds issued in connection with the Project. 3.4 Payment of Additional Rent. Within ninety (90) days after the close of each calendar year, the Developer shall submit to the City a detailed statement of Gross Sales for the preceeding calendar year, a computation of the amount of any additional Rent accrued but unpaid pursuant to the terms hereof, together with a certificate of the Developer's independent certified public accountant, addressed to the City, stating that he is familiar with the provisions of this Lease, whether his examination has disclosed any default in any payments required to be made hereunder and attesting to the accuracy of the Gross Sales -9- reported: and ;the computations of Additional Rent end accrued, butunpaid rent if the annual accounting statement of the Developer shall disclose that ,',dditional Rentis payable, the additional amount shall be paid to the City. 4,mnAiate1 after such disclosure, and if Additional Rent shall have been overpaid, the City shall credit such overpayment to the rental payments next due thereafter until such credit is exhausted. The City, or its designated representatives, hav_'che right to inspect any records and books of account of the Developer or those claiming under the Developer relating to the Hotel, and any other materials thereof or extracts therefrom, and to cause relating thereto, and to such books. records and materials.to be audited by independent certifed public accountans selected by the City as often as may be reaonably requested. Svch inspection El audit shall be at the City's expense unless such inspection or audit shall aisclose the -existence of a variance of more than five percent (5%) from the Additional Rent for such period computed in connection with the annual accounting statement furnished to the City by the Developer, in which case such inspection and examination shall be at the Developer's expense, and the cost thereof shall be immediately paid to the City by the Developer. 3.6 Offset. Rent and all other sums payable by Developer hereunder shall be paid without notice, demand, counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction except if the Developer shall incur any cost or pay any sum anywhere in this Lease prescribed to be obligations of the City, (for example, and not by way of limitation, payment by Developer of the City's obligations for any real estate and/or personal property taxes, and for insurance premiums owed by the City on -10- insurance required to be carried by the City hereunder and for maintenance, repair and/or replacement of the Convention Center, and any of the City's furniture, fixtures and equipment therein, the maintenance and repair and/or replacement of which are necessary to the support of the Developer's Improvements and provide access and other support for the overall facility) then the Developer d i t t thereont the rate shall have a claim against the City which claim an n eres a at against funds are available to the Developer, if not sooner paid, may be offset due one' year following the date on which the Additional Rent next coming claim arose. Section 4. INCREMENTAL COSTS In addition to Rent, Developershall pay to the City , $1,500,000 in the aggregate, representing the incremental cost to the City of constructing mechanical, electrical and plumbing elements in the Convention and capacity to serve the Demised Premises which structural, Center in sufficient the incremental costs would not be incurred by the City but for the Hotel. The Developer's contribution to incremental costs shall be paid pro tanto as the workprogresses based on receipt of necessary certificates submitted to the Developer. CONSTRUCTION OF THE HOTEL. 5.1 Developer's Obligation to Construct the Hotel. (a) The Developer agrees for itself, its successor and assigns, and every successor in interest to the leased estate in the Demised Premises, or any part thereof, that the Developer and such successor and assigns, shall promptly begin and diligently prosecute to completion the development of the Demised Premises through the construction of the Hotel. (b) Subject to the terms and conditions herein contained, the Developer shall construct a first class Hotel consisting of not fewer than 608 rooms, fully equipped and stocked, adequately capitalized, and ready to -11- 11 commence business within the time limits provided herein. The Hotel shall be constructed substantially in accordance with the proposal attached hereto its Exhibit "C". The Developer recognizes that the availability of the Hotel at the Convention Center is important to the successful operation of the Convention Center. The. Hotel shall be deemed to be "fully equipped and stocked," and "ready to :omience`business" if it conforms to the applicable standards of the American Hotel Association. As to whether the Developer has been "adequately capitalized", such matter shall be determined to the satisfaction of the City prior to the time that the Developer commences construction of the Hotel, which will include demonstrating to the City that the Developer has available adequate equity funds required over and above the amount of its construction and permanent lean financing. 5.2 Submission:of'Design Development Plans. Developer shall submit Design Development Plans to the City for its review and approval later than 180 days after the commencement of the Lease Term A Design Development Plans shall include the following: Site Plans to one -eighth (1/8) egress and egress, traffic patterns, project limits id rights -of -way and principal critical lines: inch scale showing proposed utility n s used herein, easements site grade elevations, at, property (b) Floor plans for each non -typical floor of the Hotel to one -eighth (1/8) inch scale; c) ': Floor plans for each typica ( floor of the Hotel one -eighth (1/8) inch scale (d) Plans for typical hotel rooms to one-half' 1/2) inch scale; (e) Vertical sections plans for principal portions of the Hotel which interfacethe Convention Center showing floor elevations and alignment t principal connections to one -eighth (1/8) inch scale; (f) Interface diagrams and other appropriate plans showing relationships and functions of the Hotel with other elements of the Convention Center; -12- of the work to be done finishes;, 5.3 ) Elevation and renderings of the Hotel; (h) ('i Specifications covering materials, methods and Construction cost estimates. Approval of Design Development Plans by the City. Upon receipt of Design Development Plans, the City shall review the plans to determine that the improvements represented thereby are substantially in accordance with those which are to be constructed by`the Developer hereunder. If the City belives that the plans submitted are not in accordance with the requirements of Section 5.1, it shall promptly notify the Developer who shall thereupon cause the plans to be revised to comply herewith and thereafter resubmit the same for approval by the City. If the plans submitted substantially comply with the terms hereof, the City shall certify its approval in writing to the Developer. The City shall Developer in writing that such days after receipt of such plans. approve the plans plans do not compl y submitted or advise the herewith within thirty (30) If theCity-shall fail to approve or disapprove such plans, within the time period provided deemed to have approved revenue such plans. 5.4 Submission of Final Development Plans. (a) Within 30 days after the validation of the City:' and expiration of the appeal period therefore, the Developer to the City final plans and specifications for the Hotel (the elopment The Final Development Plans shall include all. the City shall bonds bon will 'submit "Final Dev" of the ;information Plans"). set forth in the Design Development Plans, the order in which the various portions of the work of construction shall proceed, apportionment information as the City's architect may reasonably request. -13- the cost thereof, and such other In case this Lease shall terminate before construction and completion of the Hotel due to the default of the Developer, all plans, reports estimates and models which have been made in connection with the Hotel and which are owned by the Developer, shall become the property of the City, and the Developer shall deliver, or cause to be delivered, to the City all such plans, reports, models and estimates. Upon completion of Developer. quantity as the City may reasonabl'•request. shall deliver as -built plans and specifications to the City in such Itshall be the responsibility of the City, he Developer and their architects to design the Hotel and the Convention Center so that contiguous levels properly mesh and to coordinate the construction thereof to traffic and other matters. The Developer and its architects with respect and contractors and the City's architects and construction manager shal cooperate to and to avoid plan construction, material storage areas, staging and interference among contractors. Approval of Final Development Plans. Upon receipt of'th Final<Development Plans, the City shall review the plans for adherence to the Design Development Plans previously approved by the City. The City shall approve the plans submitted or advise the Developer in writing that such plans do not comply herewith within 30 days after receipt of such plans. If the Final Development Plans submitted substantially comply with the Design Development Plans, the City shall have an affirmative obligation to certify its approval in writing to the Developer. shall thereby Scope of Review by City. The review of plans by the City solely; for the purpose of determining that the improvements represented broad terms of size, design and quality meet the requirements hereof. not be required to review such plans in detail, and the City shall not be responsible in any way for any error or omission therein or failure of such plans to comply with any building regulation or for any inconsistency -14- or incompatibility between such plans and the plans for the Convention Center. desires , to make approved by the for its Substantive Changes In Plans. If the Developer substantive changes in the Final Development Plans City, the Developer shall submit the proposed changes to the City approval.; The City shall approve the proposed changes or advise the Developer in writing that such changes do not comply herewith within 30 days after receipt of such proposal. If the proposed changes conform to the requirements hereof, the City shall have an affirmative obligation to certify its in writing to the Developer. approval 5.8 Contract for Construction. requirements of subsection 6.4 as to the commencement of construction, the Developer shall submit to the City for its approval a contract for construction of the Hotel with a general and content, such approval' contractor to be approved by the City, as to form not to be unreasonably withheld. Within 30 days after approval by the City of the construction contract, the Developer shall submit to the City a fully executed contract for construction of the Hotel. The contract for construction satisfactory to the City which of said contract and which shall provide for notice of default under such contract to the City and the right of the City at its option to curesuch default without' penalty to the City or stoppage of the work. shall contain a provision in form and substance declare the City a third -party beneficiary shal 1 5.9 Conditions Precedent to Commencement of Construction. As conditionsprecedent to the Developer's right to commence construction, the Developer shall have: (a) secured the approval of the City for the Final Development Plans as herein provided; -15- (b) submitted evidence to the City of the availability of the equity capital and mortgage financing herein required:. (which financing shall, have been approved on the date the City delivers its revenue_ bonds • construction herein rego date the City (c) submitted to the City fired (Which contract shall delivers its (d) revenue bonds) and the proposed contract for have been approved on the submitted to the City at least 30 days prior to commencement of' construction an executed management contract with a nationally recognazeu notel management firm for the operation and management of the Hotel. 5.10 Access to Premises. Prior to the commencement of the const'rucLion, the City shall permit representatives of the Developer to have access to any part of the Demised Premises at all reasonable times for the purpose of obtaining data and making various tests concerning the Demised Premix. :' 2ssary,to carry out the terms of this Lease. 5.11 Permits and Licenses, The City agrees, in its capacity as fee owner of the Premises, to assist the Developer in securing all necessary licenses, permits and governmental authorizations in connection with thepurposes herein specified. 5.12 Progress Reports. Subsequent to commencement of the Lease Term and until construction of the Hotel shall have been completed, the Developer shall make monthly reports, in such detail as may reasonably be requested.' by City, a to the actual progress of the Developer with respect o such construction. 5.13 prompt work p? yment;of all Payment of Contractors and Suppliers. (a) The Developer shall make, or cause to be made, monies due and legally owing to all persons doing any or furnishing any materials, fuel, machinery or supplies to the Developer or any of its contractors or sub -contractors in connection with the Demised Premises and any buildings, structures or improvements thereon. The -16- Developer shall require lien waivers from contractors and sub -contractors in order to comply with the mechanics' lien lawsof the State of Florida or copy of title insurance endorsement insuring -over such claims. (b) The City shall make, or cause to be made, prompt all persons doing any work or or sub-contractors contractors buildings structures' or improvements thereon. The City shall require lien order to comply' with; the waivers from contractors and sub -contractors in mechanics' lien,`laws of the State of Florida endorsement insuring over such claims. 5.14 Mechanics' and Materialmen's Liens. Developer (a) or any contractor lien or other lien for labor, filed against the Demised thereon,, or against the. thrity (30) days of fill discharged of record, bo acceptable to City. or or copy` of title insurance If, because of any act or omission of the or sub -contractor, any mechanics' or materialmen's material, fuel, machinery or supplies shall be Premises or any building, structure or Improvement Excepted Premises, the Developer, shall, within ng of such :lien, >cause the same to be cancelled and nded o insured against by title insurance company off, r (b). If, because of any act or any contractor or sub -contractor other lien for labor against the Excepted structure or improvement thereon, or against the Demised Premises, the' City, shall within thirty (30) days of filing of such lien, cause the same to be cancelled and discharged of record, bonded off or satisfied by title opinion acceptable to the Developer. any mechanics omission of the City, material, fuel, machinery or Premises, or any building -17 - or materialmen's lien or supplies shall be filed Section 6. CONSTRUCTION OF THE CONVENTION CENTER. 6.1 The City shall construct at its sole cost :and expense fully -equipped Convention (except as set forth in Section 4) and lien free., a Center, including support elements for the Hotel, substantially in accordance with the plans prepared by Ferendino, Grafton, Spillis and Candela, identified in Exhibit "D" appended hereto and by reference made a part. hereof. If the City desires to make any substantive changes in the Convention Center as set forth in Exhibit "D", the City shall Developer for its determination as to with this Lease or; if not in conformi the Developer. If the proposed the Developer. shall as submit the proposed changes to the whether such change is in conformity ty therewith, is otherwise acceptable to changes conform to the requirements hereof, notify 'the City in writing of its determination. Additional Improvements by the City. The City shall, without expense t Developer or public assessment against the Demised Premises, ana.without impeding the progress of the construction of the Hotel by the r, provide for the following: 6.2 o the Develope technical specifications and the installation of gutters, and such public rights -of -way as are to be provided pursuant to the development accordance with the usual (a) Paving and improving in e.Gity:of such streets, including standards- of t curbs, a d catch basins street lighting, sidewalks; plan; for the Convention Center. (b) Installing and relocating such sewers, drains, water lines, and electric, telephone, and telegraph installations and gas distribution as are to be installed or relocated pursuant to the development plan for the Convention Center -18- ^:AXON "y:p 6.3 Time for Performance by City. Time is of the essence in performance by the City and the Developer of their respective obligations to construct. The Developer's performance is dependent upon performance by the City, and the City therefore covenants with the Developer to do and perform certain things within the following prescribed time limits: (a) The design development plans and specifications for the improvements to be constructed by the City have been completed on before October 20, 1978, and have been reviewed and approved by the Developer, on or before November 20, 1978. (b) Thereafter, the City must have sold and delivered its revenue bonds, commenced construction of the Convention Center, and completed thesame to the point that possession of so much thereof as may be necessary in the premises can be tendered to the Developer on or before April 1, 1980, accompanied by certifications by the City and by its architect and engineers to the Developer confirming that the Convention Center is in such state of completion that the Developer may commence construction of the Hotel, and that the i structural and support elements of the Convention Center have been completed substantial compliance with of its of the of all Garage the plans and specifications. (c) Thereafter, the City must finally complete construction improvements on or before October 31, 1981, which includes completion central plant for the production of hot and chilled water, the installation furniture, fixtures and equipment' in the Excepted Premises, the Parking public park and river walk. 6.4 Commencement'of Construction. City shall notify Developer to the time Developer shall be required to commence construction of the Hotel, which notification shall be not later than 4 days from the date the judgement of validation of the revenue bonds is entered by the Supreme Court of Florida, from which date the Developer shall have 90 days to commence construction. -1 g- Section UTILITY SERVICE 7 1 Hot and Chilled .. Water. The City represents to the Developer that the City will construct as part of the Convention Center a plant or plants to produce hot and the Convention Center and the Hotel chilled water sufficient for the needs of The City has offered and hereby agrees to sell to the Developer for use on the Demised Premises such quantities of hot and chilled water as the terms are reasonably required by the Developer in accordance with and conditions hereinafter set forth. Location and Quantity of Utility Service. As soon as possible 7.2 in the design of the Hotel, the Developer shall furnish to the City estimates of the quantities and specifications of hot and chilled water required in the the location at the boundary of the Demised Premises at wishes to receive the hot and chilled water to be provided by the City. The temperatures and pressures of the same and the point of Demised Premises which the Developer reception specified by the City, and Developer shall provide to the City the approximate quantities estimated as accurately as possible of hot and chilled water which it desire the City to provide each year, showing for each such commodity the estimated requirements for each month of the year. 7.3 Agreement to Purchase and Sell. The City hereby agrees to furnish and sell to the Developer the quantities of hot and chilled water, in ............... monthly quantities substantially in accordance with the Developer's estimate of monthly usage and at the temperatures and pressures at the point of reception in which the same shall be received will be satisfactory to the Developer. The determined pursuant to Section 7.2, and the Developer agres to take the same _20_ in Section 7.4 ■ mm 7.4 Cost of Utility Services. The Developer shall pay to the City on a monthly basis the cost of hot and chilled water delivered to the Demised Premises based upon meters at the point of reception. Such cost shall be the direct unit cost of producing the same. Cost of producing hot and chilled water shall be determined in•accordance with the Uniform System of Accounts for Municipal Utilities, including a reserve for depreciation equal to 5% per annum of the City's capital cost of the hot and chilled water plant machinery and equipment.The City shall furnish Developer an analysis of unit cost s including capital costs and depreciation within 90 days after the close of each calendar year in which the Hotel first opens for business. to the extent practical and feasible the various portions of the Demised Premises and Excepted Premises shall be separately metered or check metered so that there can be easily determined the respective obligations of the parties for the hot and chilled water, as well as for all otheer utility such provisions may be applicable. Interruption in Utility Service. The City shall not be under any.responsibil'ity or liability in any way whatsoever for the quality, quantity, impairment, interruption, stoppage, or other interference with service involving water, heat, gas, electric current for light and power, telephone or any other service, provided that any such occurrence is not due to the negligent acts or ommissions of the City. 7.6 Utilities. In addition to the provisions of this Section 7, each of the parties shall pay the cost of utility services to its respective premises or otherwise used by the respective party, including but not limited to electric, water, sewerage, telephone, garbage and trash collection. -2i- nm CONVENTION CENTER FACILITIES. Obligations of the City. The agreements and covenants of City contained in this Lease shall be binding upon the City and tire`: cost of performing the City's undertakings shall be paid from revenues of the.. Center and parking garage and from such funds of the City as may be available therefor exclusive of ad valorem property tax revenues not expressly approved for use hereunder in accordance with applicable law. 82 Pre -Opening. It is recognized that substantial additional pre -opening expenses will be required and the Developer agrees to make available for pre -opening, pre -promotion andpre-selling expenses the sum of Two Hundred Fifty Thousand ($250,000.00) Dollars as its share of such expense in promoting and Convention Center. A mutually acceptable budget therefor shall be prepared by theDeveLoper, its hotel manager, and the City. The City shall fund such budget in excess of the $250,000.00 to a maximum budget f not ;less than a ;total: of $500,000.00. It is understood that the budget for pre -opening expense 500.000.00 unless'otherwise approved by The Commission of The City 8.3 Use of Facilities. Al1:food and beverage service in the Convention Center and Conference Center shall be under a single concession hereby granted the Developer for the Lease Term. The Developer and the City shall cooperate to develop a booking procedure for the ball room banquet, exhibition and meeting rooms and other like facilities which will permit the City and the Developer to schedule the use of such facilities without conflict and result in maximizing the use of such facilities consistent with the _22_ 1 IIIII 11111M111• respective objectives of the parties. The parties contemplate that full use of facilities will necessitate hiring by the City of the Developer's facilities as well as hiring by the Developer of the City's facilities. The rates and charges for use of such facilities shall charged "third parties and the city and the Developer shall settle accounts themselves with respect; to such rates and charges when rents are between due under Section 3.3. 8.4 Maintenance of Convention "'Center. The city at its expense be the same as those shall operate and maintain the Excepted Premises, the improvements thereon and the equipment, furnishings and fixtures therein in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and"renewals thereof, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforseen. All repairs, original bearing replacements work. Such the "cost "of renewals shall be equal in quality and class to the obligation shall include, but shall not be limited to, a Convention Center sales force and an adequate staff to and service the Convention Center." business, and reserves for replacements, which reserves shall be sufficient to accomplish the City's obligation under this Section. Said reserves shall also be sufficient to accomplish the City's obligations under Subsection 8.5 If the City fails to properly maintain the Excepted Premises and furniture, fixtures and equipment therein,in the determination of the Consulting Engineer designated persuant to the Trust • Indenture securing the revenue bonds, or fails to make payment therefor from reserves established for such purpose, then, to the extent that Developer or its Lender shall perform any said maintenance, repair or replacement to City property, and/or shall pay for the same, the Developer shall be entitled to an _23_ 1111111111 MINIIIII offset against rents due City as set forth in Section 3.2. The reserve shall be funded in cash each year of not less than $100,000 per annum, and the balance on'hand >from time to time may be invested in interest bearing account or accounts, with interest earned thereon to inure to the benefit of the City. 8.5 Obli ation of Cit to Reconstruct Convention Center. In the obligation of the City regarding the repair and maintenance Premises as set forth above, to the extent that insurance proceeds are available therefor, the City shall be affirmatively obligated to repair any damage or destruction to the Convention, Center including that portion included in the Demised Premises at the earliest possible moment. This obligation to repair and reconstruct shall be binding upon the City throughout the Lease Term. Such repair or reconstruction shall be of the same to make the repaired andreconstructed portions type, quality and natureas of the Convention Center comparable with the condition thereof prior -to the damage or destruction thereof. Management of Convention Center. The Premises, Excepted excluding the Conference Center, shall during the term be placed under a management agreement with a professional management firm, having at least five in management of convention centers, or civic facilities the Convention Center. In choosing said management firm, the consult with the Developer to insure that the Convention Center, excluding the Conference Center will be maintained and operated in a first-class manner and that the operations of the Convention Center and the Hotel will be properly coordinated. The Conference Center shall be placed under a management agreement with the same professional management firm with regard to the Performance of custodial and maintenance functions only subject to the understanding that if the quality or cost of custodial and maintenance service (5) years comparabl of e City shall addition to of the Excepted experience to -24- is not satisfactory to the University, the University shall have the right toprovideits own such services. 8.7 Coordination of Maintenance and Repairs. The City and Developer expressly recognize that in the fulfillment of their respective obligations to maintain and repair the Convention Center and the Hotel, certain functions and responsibilities will overlap by virtue of the joint use of machinery and equipment. Accordingly, it is understood that a more detailed schedule of maintenance responsibility shall provide for the City making the determination of disputed areas ofresponsibility, with the Developer retaining the right to contest such determination and seek, reimbursement but only after such repair or maintenance is completed Section 9. .'`PARKING' 9.1 Construction of Parking Facilities. In connection with Developer construction of the Convention Center, the City represents to the that the City shall construct parking facilities for at least , automobiles in convenient proximity to the Convention Center. 9.2 Use of Parking Facilities by Developer. (a) The Developer shall have priority to reserve up to 249 parking spaces (or 24.9% of all parking spaces whichever is greater) as the and `oits hotel manager shall request in writing by 6:00 AM each Developer / day.' 000 The Developer shall pay for parking spaces reserved to Section 9.2(a) at the Parking Facilities, lowest daily rates time to time whether or not used. Approval of Plans by Developer and Time to Complete Parking es. The plans and specifications for the Parking Facilities shall be about the same time that the construction of the Convention (b) pursuant in effect from Faciliti compl eted 9.3 at or -25- Center is completed by the City to the point that the portions thereof are turned over to the. Developer as established in Section 6.3 for commencement of construction of the Hotel City agrees to cause such Parking and the Facilities to be constructed so that th completion of construction of the Hotel Parking Facilities shall be subject to e same is completed in timely concert with The plans and specifications for the the reasonable approval of the Developer. Parking. Facilities includes pedestrian passageways providing from, or between 9.4 the Project and said Parking Facilities Additional Parking Facilities. accessways to and . The City shall make no agreement with any third party with respect to the Parking Facility which will impair the City's ability to perform its obligations hereunder; and all agreements made by the City with any third party with respect to the Parking Facility shall expressly be made subject to the provisions of this Section 9. 95 Maintenance of Parking Facilities. The City agrees that the Parking Facilities shall be operated in a first class manner and kept in first class order and that they shall be operated at all times reasonably necessary to Obligation of City to Reconstruct Parking Facilities. In addition to the obligation of the City regarding the repair and maintenance of the Parking Facilities as set forth above, to the extent that insurance proceeds are available therefor, the City shall be affirmatively obligated to repair any damage or destruction to the Parking Facilities including any portion included in the Demised Premises at the earliest possible moment. This obligation to repair and reconstruct shall be binding upon the City throughout the, Lease Term. Such repair or reconstruction shall be of the same type, quality and nature as to make the repaired and reconstructed portions of the Parking, Facilities comparable with the condition thereof prior to the damage or; destruction thereof. _�6 _ Section 10. HOTEL MANAGEMENT. 10.1 Contract with Hotel Manager, Within ;thirty _.(30).dell ,-Prior .to the commencement of construction of the Hotel, the Developer shall submit to the. City an executed` management contract with a nationally recognized hotel management firm for operation and management of the Hotel. 10.2 Operation of First-C1ass'Hotel. shall obligate the hotel manager to operate the hotel as a first-class hotel in accordance with standards as defined by the American Hotel Association. The Developer first-class sufficient` hereby agrees that it shall cause the Hotel to be operated as a hotel and that the management contract will make provisions for be available to operate the hotel on a first-class basis. Commissions and Discounts. The Developer's trade commissions and discounts shall be only those types normally associated with the operation levels. first class hotel and shall be maintained at competitive price 104' Right of Inspection. During the term of this Lease, the City or its authorized agent may enter upon the Demised Premises at reasonable times for the purpose of making inspections of the same. During the last six (6) months of the term hereof, the City or its authorized agents may bring onto the Demised Premises such persons who are interested in purchasing or leasing the same as the City may invite for the purpose of inspecting the Demised Premises. Section 11. EQUITY INVESTMENT CAPITAL AND MORTGAGE FINANCING. 11.1 Sufficient Funds to Construct Improvements. It shall sole responsibility of the Developer to secure sufficient equity capital:a mortgage financing, in any combination thereof, to construct a manner as to meet its obligation under Section 5,1 -27- developer 11.2 shall" Developer to. Furnish Name and Address of Mortgagee. promptly furnish the City with the name and address of the .1)rtgagee and of the holder under any mortgage on the Demised Premises. 1:.1.3 Developer which has Developer to Notify City of Other Encumbrances. The shall also notify the City promptly of any other lien or encumbrance been created on or attached to the Demised Premises whether by act: of the Developer or otherwise. i1.4 Rights and Duties of Mortgagee. The permanent mortgage financing commitments and any mortgage instruments delivered therewith shall substantially incorporate the provisions set forth below. The City hereby &grees to the provisions set forth below. hall (a) cnml ,i t Pry act . he deeme a Notice of the Developer's Default. If the Developer or fail to act, and such action or failure of action shall e.f4u1t by any mortgagee, the mortgagee shall give written notice of such default o the City setting forth the specific details of the default, the description of the instrument and the particular provision thereof under which the default arises d the City shall have thirty (30) days after receipt of such an notice to cure the tocure the ' default Developer's if it shall elect to do so. If the City shall elect default as herein provided, the Developer shall reimburse the City forthe cost thereof forthwith with interest thereon at the legal rate. (b) Right of City to Complete. If any default of the type described ""in'Section 11.4(a) shall occur at any time prior to completion of construction, the City (if permitted by law to do so) may elect by notice to the mortgagee within such 30 day period to cure the Developer's defaults under an mortgage a y. nd to complete construction of the Hotel. -28- complete. If the City so elects, it shall thereafter be obligated to construction of the Hotel pursuant to the terms of this Lease on the date specified in this 'Lease for completion of the Hotel provided such date shall be extended by a period of time equal to the number of days as may be required for the City to obtain, based, on a bona fide good faith effort to diligently do so the Hotel. of the Demised Premises and legal right to complete 'The 'Mortgagee's Rights Prior to Completion of Improvements. If, prior to completion of the Hotel, the Developer mortgagee shall acquire titleto the leasehold estate in the Demised Premises then in such event, the mortgagee: subject to the City's election to complete the complete the construction of the Hotel in accordance with be agreed to in writing by the mortgagee and the City, and which date shall not be earlier than the date specified for completion of the Hotel by the Developer as extended by a period equal to the number of days as may be required by mortgagee to obtain, based on a bona fide good faith effort to diligently do so, title to the leasehold estate in the Demised Premises.and possession of the Demised Premises, If the mortgagee so elects to complete the Hotel, it shall so notify the City in writing of its intention to do so within 30 days from the date it shall have acquired both possession of the Demised Premises and title to the leasehold estate in the Demised Premises, and shall by instrument in writing, such instrument to be subject to the City's reasonable approval, agree for itself and its successors and assigns and expressly for the benefit of the City to assume all of the obligations of the Developer and to become fully bound byall of the provisions of this Lease. (2) may, with the prior written approval of the City, not be unreasonably withheld after acquisition thereof, transfer title to the -29- leasehold estate in the Demised Premises to a transferee who shall expressly sssume.all of the obligations of the Developer and to become fully bound by all of the provisions of this Lease, by Written instrument duly recorded. (d) The Mortgagee's Rights After Completion of Improvements. l , after the completion of the Hotel, the mortgagee shall acquire title to the leasehold estate in the Demised Premises, then, in such event, the mortgagee shall ofthe obligationsof the Developer and become fully bound by all the provisions of this Lease, by written instrument duly recorded. (e) Ri ht of Mortgagee to Transfer and Assign. Mortgagee convey, assign or otherwise transfer or dispose of any or all of d.interest in and to a mortgage,including any and all claims ar1iflg thereunder or arising out of the mortgage transactions without prior written. consent oftheCity, which consent the City shall not unreasonably withhold.> may not sell its right, t o of Notice of Breach of Covenant or Default. Whenever the City, pursuant to this Lease, shall deliver any notice or demand to t"e Developer with respect to any breach of covenant or default by the Developer i, the obligations of the Developer under this Lease, the City shall, at the same time, furnish a copy of such written notice or demand to any mortgagee at the lastaddress of such mortgagee as shown in the records of the City. (g) Ri ht of a Mort a ee to Cure a Breach of Covenant or by the Developer. Any mortgagee shall have the right, at its option, or remedy any breach of covenant or default by the Developer under this Lease. Any such mortgagee may add the reasonable cost (together with interest thereon at the default interest rate provided in the note secured by such mortgage) of so curing or remedying such breach of covenant or default to the debt secured by -30- such mortgage and to the lien or the mortgage. Such mortgagee shall have thirty (30) days after receipt ofnotice of said breach of covenantor defaultto indicate its intention to cure the default and commence action with respect thereto, shall thereafter diligently pursue such action. Default.. herein, (h) Additional and Rights of'a Mortgagee Upon the Developer's In;addition to any other rights of the and supplementing the same commencement'or completion leasehold estate in the Demised Premises, after having been given written notice of such default by the City, elects to foreclose its mortgage, the City shall not terminate this Lease by reason of such default as long as the holder of such mortgage is pursuing with due diligence such foreclosure proceedings. (2) In event of the Developer's default after completion of the Hotel, if the holder of any mortgage upon the leasehold estate in the Demised Premises, after having been given written notice of such default by the City,' elects to foreclose its mortgage, and agrees if successful to comply with the obligations of the Developer with respect to curing such default, or prior to or during any foreclosure such holder of the mortgage is in good faith attempting to place itself In a position to comply with the Developer's obligations with respect to curing such default, the City shall not terminate the Lease by reason of such default as Long as the holder of such Mortgage is pursuing.with due diligence such foreclosure proceedings. 11.5 Obligations of Persons, including a Mortgagee, Acquiring the Leasehold Estate: in the Demised Premises. Any person, corporation or legal Developer's mortgagee set forth the City agrees to the follow: (1) I the event of the Developer's default prior to of the Hotel , if the holder of any mortgage upon the -31- entity, (i),under any judicialsale; made under a mortgage permitted by this as the result of any proceeding or action result of any legal process Lease or action or .remedy provided therein, `(ii)'by`foreclosure in'lieu thereof, in.connection with any mortgage, or (iii) as a (other than eminent domain proceedings or proceedings by public authority), shall thereby become fully bound by all of the provisions of this Lease, provided, however, that the rights of any party, including a mortgagee, to acquire the leasehold estate in the Demised Premises is subject to such mortgagee' orvarty's curing all defaults of the Developer under the Lease are susceptible of being cured by a party other than the Developer. Assignment by Mortgagee. (a) Notwithstanding anything hereinbefore to the contrary, any mortgagee acquiring the leasehold estate shall have the right to assign such leasehold estate to a wholly -owned subsidiary of said mortgagee, it being under- stood that the principal asset of such subsidiary shall be the leasehold estate which and the improvements constructed thereon. (b) Notwithstanding anything hereinbefore to the contrary, any mortgagee or party described in Section 11.5 or Section 11.6 acquiring the leasehold estate shall have the right to assign such leasehold estate and said mortgagee or party described in Section 11.5 or Section 11.6 shall thereafter be forever released and discharged from this the obligations of this Lease. 11.7 Mortgagee's Right to a New Lease. (a) Notwithstanding any provisions which th Citymay declare a default and terminate or can cancel e of this. Lease under. this Lease or Developer's rights or interests hereunder, no notice of defaul to the Developer t or other action by the City to declare a defau -32- given y :the other': than City a notice ofdefault in payment of rent, or other charges which can be corrected: or cured by the payment of money) shall be effective to terminate this Lease, if and so long as any leasehold mortgagee shall promptly '(after `the giving of such further notice to the leasehold mortgagee) commence the enforcement of and diligently pur- sue all rights and remedies legally available;' to it to correct or cure all defaults, (other than defaults which are not within the power of the leasehold mortgagee to correct or cure, and, which shall be deemed waived as to said leasehold mortgagee), if and so long as the leasehold mortgagee shall promptly commence the enforcement of anddiligently pursue all rights and remedies legally available to it to acquire tr:e leasehold estate hereunder,. and upon acquisition thereof, perform all of the covenants and provisions on the part of the Developer .to be performed during the period;ef its ownership of the leasehold estate. (b) If this Lease should terminate by reason of the happening o any event. of default, and i.f', at the time of such termination, there are any leasehold mortgages constituting liens upon the leasehold estate of Developer, the i ty shall give notice thereof to the holders of such mortgages and upon request i the holder of the first leasehold mortgage made within sixty days after the giving of notice by the City to such holder, or of the holder of a subordinate leasehold mortgage more than sixty, but within ninety days after the giving of such notice (if said holder of the first leasehold mortgage has failed to request a new lease), and upon payment to the City of all rent, and all other monies due and payable by the Developer hereunder and the curing of all defaults hereunder up to the date of such termination which are within the power of such holder to cure and the performance of all of the covenants and provisions hereunder up to the date of such termination which are -within the power of said holder to perform -33- the power of said holder to perform shall "beydeemed (any default not within waived as to such holder), the City shall enter into and deliVer a new lease of the Demised Premises with such holder for the remainder of the term at conditions as contained it and the same rental and on the same terms, provisions, ' this Lease, including all rights of extension thereof, a date of termination of this Lease and deliver a o such holder, free of encumbrances thereon by .the City. The estate of the holder of such leasehold mortgage, as lessee under the the estate of the Developer hereunder nd dated as of the, quitclaim deedof the Hotel t liens, claims or charges imposed new Lease, shall have priority (that is, there shall be.no equal charge, t lien or burden upon the Demised Premises prior to or su perior.t ranted by such new lease which was not prior to or superior to tDeveloper` under this Lease as of the date immediately preceding the date this Lease went into default, except, however, any charge, lien or,burden which should not have -been permitted and or should have been dis- The quitclaim deed to the e g othe estate estate of the charged by the Developer under the terms of this Lease). Hotel shall lease shall title to recite that the ;`grantee continue in full the Hotel shall holds title to the Hotel onlo so long as the new force an revert to grantee covenants not to convey ment of the lessee's interest t the e Ho in the _n effect, that upon termination of the new lease, City automatically without payment, that the tel except simultaneously and with an assign- leaseew and except to the assignee thereof, and that such covenants shall run with the property conveyed and bind all future owners thereof. Nothing herein contained shall be deemed to impose any obligation upon the. City to deliver physical possession of the Demised Premises to the holder of such leasehold mortgagee unless the City has physical possession thereof. Said holder shall pay all expenses, including reasonable attorneys' fees, incident to the execution and delivery of such new lease a -34- shall be entitled to an adjustment in the amount equal to the net income, if any, derived from the Hotel during the period from the date of termination to the date of execution of such new lease. Limited Liability. Notwithstanding` the covenants, agreements, conditions and undertakings herein are in substance and in form expressed in language creating personal covenants on the part of the mortgagee, the liability of mortgagee and of mortgagee's successors or assigns, and the liability of any party described in Section'11.5, and such party's successors and assigns, shall be limited to and shall not extend beyond the leasehold estate hereby created and a mortgagee's or such party interest in the Hotel, and a mortgagee and any such party described in Section-11.5, and their respective successors and assigns, shall never be held personally liable on any covenant or agreement or understanding herein expressed, nor shall any action lie against a mortgagee or such party, or their respective successors or assigns, to enforce or exert any obligation or liability hereunder, except as enforceable against the leasehold estate, it being the intention of the,parties that the sole remedy of the City in enforcing liability hereunder and all of the terms, covenants and conditions in this Lease contained shall be limited to or such party. 11.9 the leasehold estate and interest in the Hotel of a mortgagee Amendments Subject to Consent. and the Developer agree that this Lease shall not be amended without the prior written consent of any holder of a first mortgage lien on the Excepted or Demised Premises and the consent of the Trustee under the trust agreement securing the proposed bonds of the City, unreasonably withheld. -35- Section 12. RESTRICTIONS ON USE. 12.1- Authorized Uses. The Developer shall use and operate the Hotel as a first-class hotel and the Additional Hotel Spaces for the intended purposes and square footages as follows: Additional Hotel Space Number As Shown on •Fxhibit "B"` 1 2 Intended Purpose Engineering/Maintenance General Storage Men's and Women's Lockers and Toilets 4 Housekeeping 5 Laundry Rooms 6 Personnel/Security 7 Receiving/Personnel 8 Accounting 9 , Kitchen/Employees' Cafeteria:'. 10 Hotel Offices 11 Trash Room 12, Food Service Corridor 13 ' Ballroom Storages 14 Liquor Storages/Cooler 15 Main Ballroom 16 Pre -Function 17 Retail 18 Front Desk 19':; Lobby Lounge 20 Public Toilets 21 Coffee Shop 22 Kitchen 23 Oyster Bar 24 Restaurant 25 Palm Court It is agreed that within the above total Total Area in SquareFeet 2,461 2,773 2,473 3,048 4,510 280 2,555 1,380 8,674 3,840 384 629 2,349 651 11,248 3,700 24,354 2,169. 1,968 1,080 3,049 3,321 1,517. 5,747 3,770 97,925 S.F. square footage of 97,925 S.F. the various areas in square feet are estimates only and may be modified if necessary. 12.2 Gaming. In the event gaming is legalized or authorized within the State of Florida, Dade County and the City of Miami, it is hereby specifically agreed that the Demised Premises may be used for such gaming purposes pursuant to licensing from the appropriate governmental authorities should such licensing be - 36 obtained by the Developer.'- 0,c! rent hereunder provided Live with .Jconing is tenants operation section 1 cJvenants industry standards Permitted. 12.3 In such event, the "City shall be entitled'to renegotiate that any additional. rent to the City shall-be'competi n effect for other similartype facilities' where such Limitation on Retail Sub -tenants. The Developer' and concessions shall be only those types f a first class hotel and convention center. PUBLIC CHARGES. 13.1 Covenant for Payment of Public Charges. The Developer retail sub- normally associated with the alid'agrees to pay and discharge, before any fine, penalty, cost maybe addedall taxes, service charges, water rents, and charges,`( hereinafter called "Public Charges") which, harge, 4 Jn or a IGitn or the Developer mitted by. Public Charges by appropriate proceedings and, if the Developer is prosecuting such proceedings with reasonable diligence, may, to the extent permitted by law, postpone or defer payment of Public Charges so long as such contest shall continue. 13.2 _ Evidence of Payment of Public Charges. The Developer, upon request, shall furnish or cause to be furnished, to the City and to any mortgagee, if the Demised Premises are encumbered with a mortgage, official receipts of the appropriate taxing authorities or other proof satisfactory to the City or the mortgagee, evidencing the payment of any Public Charges which were due and payable interest or other public if not paid, would be a lien upon or against the Demised. Premises, or any part thereof, or he Rent. Notwithstanding the provisions of the preceding sentence, 1 aw, shall on the remise have the right to pay Public Charges in installments if per - and to contest the amount. or validity, in whole or in part, of any Premises thirty (30) days or more prior to the date of such request. - 37- demands damages, losses and other reasonable expenses and costs property damage, resulting from gence or fault of the subcontractors or any with (1) any building, construction, 13.3 Payment of Public Charges by City. The City will promptly pay and discharge any Public Charges applicable to the Excepted Premises, although the City may be reimbursed by the University for any such charges applicable to the Conference Center. Section 14. INDEMNIFICATION AND INSURANCE. 14.1 (a) Indemnification by Developer. The Developer shall pay, indemnify and save harmless the City, its agents, and employees from all suits, actions, claims, of every kind and description' to which the City, or their agents or employees may be subjected by reason of personal injury, or injury to persons or death or or growing out of any commission, omission, negli- Developer, its agents or employees, or its contractors or lessee of the Developer or its hotel manager in connection installation or development work, service or operation being undertaken or performed by or for the Developer in, on or over the Demised' Premises, or (ii) any uses, occupancy, maintenance, repair and improvements, or operation of the Premises after the commencement of the Lease Term: provided, however, that such indemnification: (1) shall be limited to the extent that the City, its agents or employees are not protected by insurance, whether such insurance has been supplied by the Developer, the City, its agents or employees, and (2) shall not be applicable where a decision or judgment of a court of competent jurisdiction holds that any personal injury, or injury to persons or death or property damage was the direct and primary result of acts of commission, omission, negligence or fault of the City, its agents or employees. The Developer shall pay all costs and expenses which may be incurred by, and any monies due under any -38- ,udgment or decree rendered against the City (i).in enforcing compliance by the Developerwith proVisions of this Lease, ;or (ii) in defending any suit or pro- ,:ceding brought against the City for the violation by the Developer of any law nr ordinance during the Lease,Term,'or (iii) in defending any action or, 'suit which indemnification is required hereunder, or (b) on the, part of' the DeveloP er in the performance of any obligatiOfl of the Developer under the If the City shall be made a. party to any litigation with respect, to,any matter growing out of this Lease as to which the Developer is at fault, the. Developer shall pay all judgments, decrees and costs or expenses incurred by or imposed City in connection therewith. (b) Indemnification by the City. (a) for or the indemnify and save harmless the Developer, its suits, actions, claims, demands, damages, losses and other reasonable expenses and costs of every kind and description to which the Developer, or their agents or employees may be subJected by reason of personal injury, or injury to persons or c+ ath or property damage, resulting from orgrowing out of any commission or c dss ion -of the City, its agents or employees, or its contractors or sub -contractors or arly,=lessee of the City in connection with (i) any building, construction, installation or development work, service or operation being undertaken or per- formed by or for the City i,n, on or over the Excepted Premises, or (ii) any uses, occupancy, maintenance,, repair and improvements, or operation of the Excepted Premises after the .commencement of heLease Term: provided, however, that such indemnification: (1) shall be limited to the extent the Developer, its agents or employees are not protected by insurance, whether such insurance has been supplied by the Developer, the City, its agents or employees, and (2) shall not be applicable where a decision or judgment of a court of competent jurisdiction Lease. - 39- agents, The City shall pay, and employees from all i holds that any personal injury, or injury to persons or death or property damage was the direct and primary result of acts of commission, omission, negligence or fault of the Developer its agents or employees. The City shall pay all costs and expenses which may be incurred by, and any monies due under any judgment or decree rendered against, the Developer (i) in enforcing compliance by the City with provisions of this Lease, or (ii) in defending any suit or proceeding by the City of any law or ordinance brought against the Developer for the violation during the Lease Term, or (iii) in defending any action .or indemnification is required hereunder or (b) on the part of f any ;obligation of, the City un, o performance shall be made of this decrees party to any litigation wit suit (a) for; which the City in the der this.Lease. If the Developer respect to any matter growing out lt,.the City shall pay all judgments, imposed on the Developer in connection Lease as to which the City; is at faul costs or expenses incurred by or therewith. 14.2 Types of Insurance to be Carried by Developer. (a' Propertv Coverage During Construction Period. During the construction the Developer, at its expense, shall keep all of the roperty and equipment on the Demised Premises insured against loss or result of fire and those other hazards known as "All Risk Coverage" under a Builder's Risk insurance policy for physical damage or loss, to the extent that such insurance is available from most insurers of recognized responsibility authorized to do business in Florida. Such insurance shall be in an amountnot less than 100% of the cost of construction of said buildings, property and equipment. Each insurance policy shall provide for including the City as an additional insured, as its interest may appear, and for loss to be payable to the Developer and any mortgagee. insurable buildin period, s, damage as a -40- Limit of $10,000,000.00, for personal injury, injury to for property damage. Each policy shall name the City, the University and any mortgagee as an additional insured and each policy shall contain cross -liability endorsements. (d) Comprehensive General Public Liability Coverage After Construction Period. After the construction of the Hotel has been completed, the Developer shall secure and maintain, or cause to be secured and maintained, in full force and effect comprehensive general public liability insurance as will protect the Developer, the City, their agents and employees, from any and all claims for damages for personal injury or death, or for damage to any property of the City or the public which may arise out of the Developer's use and occupancy of the:Demised Premises and the operation of a hotel thereon. The amounts of such insurance shall not be less than a combined single limit of $10,000,000.00, personal injury, injury to persons or death or for property damage. Each policy the University and any mortgagee as additional insureds and each policy shall contain cross -liability endorsements. (e) Comprehensive Automobile Liability Coverage. The Developer shall secure and maintain, during and after the construction period, such comprehensive automobile liability insurance, including non -owned and hired car coverage, as will protect the Developer, any mortgagee and the City, from any and all claims and damages for personal injury or death or property damage to any property of the City or of the public which may arise out of or in connection with the performance of any work or operations done by or for the Developer in, on or over the Demised Premises during and after construction whether such work or -42- ''.he Lease Term, :i1cir.ys,. (b) Property Coverage After Construction Period. During the Developer, at its expense, shall keep all of the insurable property and equipment on the Demised Premises insured against loss or result of fire and those other hazards ordinarily insured against from time to time during the term hereof in the City of Miami, Florida in policies providing for "All Risk Coverage" for physical damage or loss, to the extent that such insurance is generally available from most insurers of recognized cSPOAS40. 4 authorized to do business in Florida. Such insurance shall be in an amount sufficient to prevent Developer from being a co-insurer and shall be eased on nit less than ninety percent (90%) of the replacement value of said build- ings, prope ty and equipment. To the extent that insurance proceeds are available, the Developer shall be obligated to repair any damage or destruction to the Demised Premise" ''13 earliest possible moment. Each insurance policy shall name the r'ity as af, `a,;,i'itional insured, as its interest may appear, and for loss to be payable tc tre Developer and any mortgagee. (c) Comprehensive General Public Liability Coverage During Construction Period. The Developer shall secure and maintain or cause to be secured and maintained in full force and effect such comprehensive general public 1iih;lity insurance as will protect the Developer, the City, the University, their agents and employees from any and all claims and damages for personal injury, injury to persons or death, or damage to any property of the City or of the public, which may arise out of or in connection with the performance of any work or operations by the Developer in, on or over the Demised Premises during the construction of the Improvements, whether said work or operations be by the Developer, or its contrac- tors or sub -contractors, or by anyone directly or indirectly employed by any of them. The amounts of such insurance shall not be less than a Combined Single -41- !fie Lease (b) Property Coverage After Construction Period. During the Developer, at its expense, shall keep all of the insurable Aidino Ajtverty and equipment on the Demised Premises insured against loss or result of fire and those other hazards ordinarily insured against from time to:time during the term hereof in the City of Miami, Florida in policies providing f'or'"All`Risk Coverage" for physical damage or loss, to the extent that such insurance is ;generally available from most insurers of recognized .�spo:i :.,.y authorized to do business in Florida. Such insurance shall be in an amount sufficient to prevent Developer from being a co-insurer and shall be less than ninety percent (90%) of the replacement value of said build - Pined on nit ings, property and equipment. To the extent that insurance proceeds are available, the'Developer shall be obligated to repair any damage or destruction to the Demised Premise, city as '. earliest possible moment. Each insurance policy shall name the ar, aoditional insured, as its interest may appear, and for loss to be payable' to tr,e Developer and any mortgagee. (c) Comprehensive General Public Liability Coverage During ConstructionPeriod. The Developer shall secure and maintain or cause to be secured and maintained in full force and effect such comprehensive general public liability insurance as will protect the Developer, the City, the University, their agents and employees from any and all claims and damages for personal injury, injury to persons or death, or damage to any property of the City or of the public, which may arise out of or in connection with the performance of any work or operations by the Developer in, on or over the Demised Premises during the construction of the Improvements, whether said work or operations be by the Developer, or its contrac- tors or sub -contractors, or by anyone directly or indirectly employed by any of such insurance shall not be less than a Combined Single ********************************************** * The original from which this microfilm *********************************************** * was taken was awfully poor. -41- * This is the best photograph we * could obtain. operations be by the Developer, or its contractors or sub -contractors, or by anyone directly or indirectly employed by any of them. The amount of such insurance shall be not less than a combined single limit of $10,000,000.00 for injury or death orproperty. (f) Workmen's Compensation'Coverage. The Developer shall secure and maintain, in full force and effect, such Workmen's Compensation as is required under the laws of the State of Florida. (g) Business Interruption and Other Insurance. After com- pletion of construction,` the Developer shall secure and maintain or cause to be secured and maintained and effect business interruption insurance and such other insurance against other insurable hazards not provided for in•this Lease which are from time to time applicable to a first-class hotel in such amounts as shall be recommended to the City by an independent, experienced and qualified insurance consultant for protection against losses and liabilities which the Developer would incur and continue to bear during a period when the Hotel or a portion thereof are out of operation due to fire or other casualty and the broadest form of extended coverage including, without limitation, the loss of rent by the City. The City;;and Limited Release of Liability and Waiver of Subrogation. the Developer release each other, and their respective authorized representatives, from any claims for damage to any person or to the premises that are causedby or result from risks insured against under any insurance policies carried by the City or the Developer and in force at the time of any such damage. The City ,and the Developer shall cause each insurance policy obtained by either to provide that the insurance company waives all right of recovery by way of subrogation -43- City to t acainst any insured party in connection with any damage covered by any policy. if the release of the City or the Developer as set forth in the first sentence this subsection shall" contravene any law with respect to exculpatory agree- --ant s , e liability of .theparty in question shall be deemed not released but shall be secondary to the other's th insurers. 14.3 Non -Cancellation Clause. All insurance policies or agreements shall provide (to the extent such provisionis obtainable) that or terminated until after at lease "fifteen (15): days they prior notice has been given to the City to the effect that such insurance policies agreements are to be 14.4 cancelled or terminated at a particular time. Certificate of Insurance. The Developer shall provi e or the City with such certificates of insurance or other acceptable proof of compliance with the'nsur•ance 14. at any time refuse effect any;or �al1 i option may procure provisions of this Lease. Right of City to Obtain Insurance. In the event the' Developer s, neglects or fails to secure and maintain of the insurance required pursuant to this or renew such insurance and all amounts n full force and Lease, the City at of money paid there- for by the City shall be payable forthwith by the Developer to the City with at the legal rate per annum from the date the same were paid by h date of payment thereof by the Developer. The City shall notify writing of the date, purposes and amounts of any such payments 1 iilerest thereon the the Developer in made by . e 14.6 Non -Waiver of Developer's Obligations. No acceptance or approval of any insurance policy or policies by the City shall relieve or release or be construed to relieve or release the Developer from any liability, duty or oHigetion assumed by, or imposed upon it by the provisions of this Lease. 4 4- 14.7 Mutuality of Irsurancp Obligation. All insurance obligations of the Developer hereunder as they relate to its procurement of insurance on the Hotel shall equally apply to the City in its procurement of insurance for the Convention Center and the Parking Facilities, including, without limitation, the naming of the Developer as an additional insured. 14.8 Reasonable Deductible. All types of insurance required by this Section 14 may contain a reasonable deductible provision provided the City is given advance notice of said deductible provision and approves the same in writing. Ln ur nrp Carriers; Mandatary rquraragp, The City and the. Developer shall cause property, comprehensive general liability and comprehensive automobile liability coverage to be procured from the same insurance carrier or respectto the property coverage to carry the same on the basis upon replacement cost from time to time as projected by such insurance carrier or carriers. Maintenance of insurance by the City and the Developer is obligatory, and neither the Developer nor the City shall be permitted to be self -insurers, except with regard to the reasonable deductible applicable to property coverage. Section 15. MAINTENANCE, REPAIR AND REPLACEMENT. 15.1 Maintenance and Repairs. The Developer, at its expense shall keep the Demised Premises, the Hotel and the equipment and furnishings therein in good and clean order and condition and will promptly make all necessary or appropriate repairs, replacements and renewals thereof, whether interior or exterior structural or non-structural, ordinary or extraordinary, foreseen or unforeseen. All repairs, replacements and renewals: shall be equal in quality and class to the original work. The Developer shall comply with all laws, ordinances, codes and -45- regulations applicable thereto. The Developer shall have the right, after written notice to the City, to contest by appropriate legal proceedings, conducted in good faith, the validity or applicability of any such law,: ordinance,. code or rec;ulation, and to delay compliance therewith pending the: prosecution of such proceeding, provided no civil or criminal liability Would be incurred by the. City cry no lien or charge would be imposed upon or satisfied out of the Demised Premises by reason of such delay. 15.2 Reserve for Replacements. The Developer shall establish a reserve for replacements in the minimum amount of $324.00.per room per year to provide funds for replacement or improvement of those, parts of the Improvements and equipment and furnishings therein which are subject to deterioration as a result or ordinary use and wear and tear so that the Demised Premises will at all times be kept and maintained in first-class condition and repair. Such reserves shall be maintained' in a separate bank account and may be expended by Developer only for the purpose set forth in this Section. Said reserve amount of $324.00 per room ie subject to upward increases, for equivalent increases in the Consumer Price Index or such other comparable index which may be in effect from f r the City of Miami time to time if said Consumer. year the Hotel First Opens 15.3 Waste. Price Index is unavailable, using the index for the for Business as the base year. The Developer shall not permit, commit or suffer waste or impairment of the Demised Premises thereof. or, the Hotel; thereon, or any part 15.4 Alterations' of Improvements.' The Developer shall right, from time to time,to make such al -46- terations and improvements, have the structural or otherwise, to the Demised Premises and the Hotel, as the Developer deems desirable; provided, however, that the Developer shall not, without the prior written consent of the City, demolish all or any part of the Hotel, or change the Hotel so as to make it less compatible with the operation of Convention Center. Section 16. FIRE OR OTHER CASUALTY. 16.1 Any Loss or Damage. If there is any loss or damage by fire or other casualty to the Hotel, the Developer covenants and agrees to diligently com- mence and complete the reconstruction or repair of such loss or damage, to the same size, floor area, cubic content and general appearance as prior to such destruction promptly after the City has approved the Developer's design development plans for such reconstruction or repairs If the Hotel is not repaired or recon- structedLeaseshall terminate and any insurance proceeds shall be applied to retire any 'indebtedness ,the Demised Premises and the balance shall this mort gage to the 'City'which shall be in lieu of a complete have: upon termination of this Lease. be paid would otherwise 16 2 Partial Loss Any loss or damage by fire or other unusable for hotel purposes in building which the City r Damage Not to Terminate Rent or Agreement. casualty which does not render the Hotel the City' shall not operate to terminate this Lease a d the Developer's reasonable judgment, or to relieve or discharge the Developer, from the performance and fulfillment of any of the Developer's obligations pursuant to this Lease. 16.3 Extensive Loss or Damage Rendering Improvements Unusable for Hotel Purposes. Any extensive loss or damage which renders the Hotel substantially unusable for hotel purposes in the City's and the Developer's reasonable judgment shall not operate to terminate this Lease but shall have the effect of causing an abatement of rent as to the unusable -47 such time as the loss or. r1'ed. (b )' damage to the unusable portions is repaired and the Hotel is reconstructed and operational pursuant to the following sections: Suspense Account for Insurance Proceeds: Whenever the Hotel, or any part thereof, shall have been damaged or destroyed, the Developer shalltlY Make Preof of loss and -- to collect, or cause shall r' -: r tc be collected, all valid claims which may have arisen against insurers'or others based upon such damage or destruction. The Developer's first mortgage lender �.h11 have a right to participate in the settlement of such claims. All proceeds ur any such claims (and any other monies provided for the construction, restoration, or reoair) shall be by the Developer's first mortgage lenderfor application us set forth in Section 16.1 or 16.3(b) as the case may be. In the event that the Hotel is destroyed or damaged, the Developer shall promptly give the City written notice cf such damage or destruction, stating the date on which such damage or tructi �cc Disposition of Proceeds of Insurance Not Used for Repair or. Reconstruction. If the amount of insurance proceeds shall be excess, in excess ttie election of the of the cost of repair or reconstruction,;such at mortgagee, shall be applied to reduce the mortgage indebtedness encumbering the nernised Premises or paid to the Developer. Section 17. CONDEMNATION. 17.1 Adjustments of Rent. (a) If Entire Project is Taken. In the event the Project in its entirety shall be acquired under the exercise of the right of eminent domain, then the Rent and the Public Charges shall be prorated and paid by the Developer co the date possession is taken by the authority exercising the right of eminent domain. -48- during the Lease Term, the division of the compensation therefor shall (b) If Part of Project is Taken. As of the effective date of such acquisition, the Rent shall be reduced in direct proportion to the ratio of the area of the part of the Demised Premises so acquired to the total area of the Demised Premises; provided, that if such reduced Rent shall be deemed grossly inadequate or excessive by the City and the Developer equities exi sting at the time of such taking into account the acquisition of part of the Demised Premises including, without limiting the generality of the foregoing language, the rentals and other income being realized by the Developer from that portion of the Hotel located on the part of the Demised Premises so acquired, the Rent may be reduced or increased to such other amount or amounts as may be agreed upon in writing by of the Demised Premises or the Hotel shall of such Demised Premises or the Hotel and the Developer. If any part to render` the remainder the City be so acquired thereof this Lease, thirty (30) the Demised Premises are intended by the right to terminate this Lease on within ninety (90) days of such acqui- sition. In such event, the Rent and the Public Charges shall be prorated and, paid by the Developer to the effective date of such acquisition. unusable for the purposes for which then the days notice 17.2 Developer shall have to the City, given Proration of Condemnation Awards. In the event the Project or part thereof, shall be acquired under the exercise of the right of eminent domain at any time be based upon the respective interest at law of all parties having an interest in the Project. Any portion of such compensation attributable to the Demised Premises and the Hotel shall be applied first to restoration, if the Hotel can be restored, and then at the election of the mortgagee, to retire mortgage indebtedness or be paid to the Developer. 17.3 Condemnation by the City. As a condition precedent to :nndemnation of the Developer's interest in the Demised Premises by the City, the ity Lgrees that it shall offer to purchase the Demised Premises and the Hotel at (“v market value, but not less than a sum which is equal to the Developer's cash equity plus the amount due on the mortgage or mortgages then outstanding and r.Lced by Developer against the Demised Premises with fair opportunity to accept o» reject the City's offer. The foregoing shall not limit the amount which the :Icn r be entitled to recover in condemnation by the City under applicable law. Scction 18. DEFAULT - TERMINATION. 18.1 Default by the Developer. There shall be an event of default '.)y the Devel0Per under this Lease if: (a) The Developer shall fail to pay any installment of Rent otoLr .30al due to the City hereunder when and as the same becomes due and payable anc such failure shall continue for more than ten (10) days after written notice thereof from the City to the Developer; or (b) If the holder of any indebtedness secured by lien on the ;JeveloPer's interest in the Demised Premises (whether or not the Developer is p?rsonally liable for such indebtedness), shall declare the Developer in default of the terms of such indebtedness, or of any instruments relating thereto, beyond any grace period provided with respect thereto, and such default shall not have 1,een waived; or (c) The Developer shall fail to perform or comply with any other material term or provision hereof and such failure the shall continue for more than thirty (30) days after the City shall have givenDeveloper notice of such failure; or -50- (d) The Developer shall make a general assignment for the benefit of creditors, or shall admit .i n t't ti ng its inability to pay its debts as they become due or shall bankrupt or insolvent, or in bankruptcy, or shall be adjudicated a seeking any reorganization arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation,' or shall file an answer admitting, or shall fail reasonably to contest, the material allegations of a petition filed against it in any such proceeding, or shall seek or consent to or acquiesce in the or any material against appointment of any trustee, part of its Properties ; or (e) Within 90 ,days the Developer seeking justment, liquidatio statute, 1 within 90 receiver or liquidator of the Developer after the commencement of any `proceeding any reorganization, arrangement, composition, read dissolution or similar relief under any present or future aw or regulation, such proceeding shall not have been dismissed, or if, days after the appointment without the consent or acquiescence of the Developer of any trustee, receiver or liquidator of the Developer or of any material part of its properties, such appointment shall not have been vacated; or (f) The Developer shall fail to give notice to the City of the securing of sufficient funds to construct the Hotel within six (6) months from the date of the City, t execution of this Lease. In such event, but subject to Section 11 hereinabove, the any thereafter, may give a written notice of termination to the Developer, and on the date, specified in such notice, which shall not be less than sixty (60) days, this Lease shall terminate and the term hereof shall expire and all rights of the Developer hereunder shall cease, unless before such date specified arrearages of Rent payable to the City under this Lease and (ii) all other hereunderat that time existing shall have been remedied. In the event of the occurrence of (f) above, the Developer's obligations hereunder shall cease. 18.2 Default by City. There shall be an event of default by the City under this Lease if (1) the City shall have failed to prepare the Premises for development in accordance with the provisions hereof or (2) the City shall have failed to construct the Convention Center or Parking Facility or shall have been delayed in completing same on or before the time provided herein. In such events the Developer at any time thereafter, may give a written notice of termination to and on the date specified in such notice, which date shall not be less this Lease shall terminate and the Developer's obligations hereunder shall cease, unless before such date the City shall have cured the default. In the event of a delay by the City in completing the facilities contemplated by th? pity',. than thirty (30) days (?) above, the City shall be required, as an element of damages, to incur the additional interest expense payable by the Developer to its mortgage lender until ch time the Convention Center is completed. After timely completion of the rmentioh Center and Parking Facility, the Developer's remedies shall be legal action against the City or the right to perform any obligation of the City hereunder ar,d to pursue the cost of curing such default (plus accrued interest at the lawful maximum) by legal action. In addition to payment of interest expense incurred by the Developer attributable to any delay caused by the City, the City shall also pay such other reasonable costs and expenses incurred by the Developer attributable to such delay, which may include those such as additional commitment fees to extend any construction or permanent loan commitment, or additional cost to obtain a new construction or permanent loan commitment if by reason of such delay the .-(is:ing construction or permanent loan commitment is canceled. 18.3 Obligations, Rights and Remedies Cumulative. The specified rights and remedies to which either the City or the Developer may resort under the terms of this Agreement are in addition to any other remedies or means of redress to which the City or the Developer may be lawfully entitled. 18.4 Non -Action on Failure to Observe Provisions of this Lease. The failure of the City or the Developer to insist upon strict performance of any term, covenant, condition or provision of this Lease shall not be deemed a waiver of any right or remedy that the City or the Developer may have, and shall not be of a subsequent default of such term, covenant, condition or deemed a waiver provision. Non -Performance Due to Causes Beyond Control of Parties. In the event performance of any of their respective covenants, agreements or obli- gations under this Lease or Agreement by the City or the Developer is prevented, interrupted or delayed by causes beyond its control, including but not restricted flood, acts of God or of the public enemy, acts of the fires, epidemics, quarantine restrictions, to strike, riot, Government, acts ofthe freight embargoes and unusually severe weather, or delays of sub -contractors due to such causes, and not caused by any act or failure to act by the party thereby delayed in such performance, the date or time or times for the performance of such covenant, agreement or obligation by the City or the Developer shall be extended for a period of time equal to the number of days the performance of such covenant, agreement or obligation by the City or the Developer is so prevented, interrupted or delayed and, in such case, neither the City nor the Developer shall be liable for any costs, losses, damages, injuries or liabilities caused to or suffered or incurred by the City or the Developer in connection with such covenant, agreement or obligation. In theevent that the City or the Developer intends to avail itself of the provisions of this Section, the City and the Developer shall give written notice of such intent to the other; such notice to be given is not to exceed fifteen (15) days from the date performance of such covenant, agreement or obligation was so prevented, interrupted or delayed. 18.6 Surrender of Demised Premises. Upon the expiration of the Lease Term hereunder in respect to the Demised Premises pursuant to Section 18 or any other provisions hereof, it shall be lawful for the City to re-enter and repossess the Demised. Premises and the Hotel without process of law, and the Developer, in such event, does hereby waive any demand for possession thereto, and agrees to surrender and deliver the Demised Premises, the Hotel and all furniture fixtures and equipment thereon peaceably to the City immediately upon such expiration or termination in good order, condition and repair, except for reasonable wear and tear. 18.7 Ownership of Improvements. The title to the Hotel and to any additions or improvements thereof shall forthwith vest in the Developer and shall be and become the property of the Developer; provided, however, that upon the termination of this Lease, either by default or expiration of its term, the Hotel and any additions or improvements thereto shall become the absolute property of the City, clear of all encumbrances and charges, and without cost of any kind to the City. Party in Position of Surety with Respect to Obligations. The Developer, for itself and its successors and assigns, and for all other persons who are or who shall become, whether by express or implied assumption or otherwise, liable upon or subject to any obligation or burden under this Lease, hereby waives, to the fullest extent permitted by law and equity, any and all claims or defenses otherwise available on the ground of its (or their) being or having become a person in the position of a surety, whether real, personal, or otherwise or whether by agreement or operation of law, including, without limitation on the generality of the foregoing,: any and all claims and defenses based upon extension of time, indulgence, or modification of terms of contract. Section 19. QUIET ENJOYMENT. The City covenants that the Developer, upon paying the Rent other charges herein provided for, and upon performing all of the other covenants, and complying with agreements, terms and conditions of this Lease on its part to be performed or complied with, shall not be hindered or molested in its enjoyment of the Demised Premises or of its air light and view. Section 20. MISCELLANEOUS. 20.1 Non=Discrimination. discriminate the construction, sub -leasing, use, occupancy or operation of the Demised Premises or the Hotel to be erected thereon, and that each contract, sub -lease or agreement with respect thereto shall specifically contain this provision. 20.2 . Equal Opportunity Provision. (a) In the construction and operation of the Hotel neither the. Developer nor any contractor or manager employed by the Developer shall discriminate against any employee or applicant for employment because of race, color, religion, age, sex or national origin, and they shall take affirmative action to ensure that applicants are employed, and that employees are treated during employ- ment, without regard to their race, color, religion, age, sex, or national origin. The Developer agrees i.t wil color, creed, national origin, age or sex in -55- Such action shall include, but not be limited to, the following: Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising, layoff or termination; rates of pay or other forms of compensation, and selection for training, including apprenticeship. The Developer agrees to post in conspicuous places, available to employees and applicants for employment, notices to provided by the City setting forth the provisions of this Equal Opportunity Clause, and to u contractor or manager to do likewise. Developer and any contractor or manager shall, in cause anycontractor, s (b):; The all solicitations state that b- or advertisements for employees placed by them or on their behalf, will` receive consideration or employment without sex or national origin. They shall send to qualified applicants all regard to race, color each labor union a collective 0 religion, bargai be provided by their the commitments the notice in age r representative`'of workers with which they, or any of them, have nin agreement or other contract or understanding, a notice, to City, labor union or workers; representative of under this Equal Opportunity Clause, and shall post copies of advising the available !ann1icants for employment. conspicuouplaces sand Any contractor or sub Order contractor shall comply with all provisions of Executive September 24, 1965, and of the rules, regulations and relevant orders of the Secretary of Labor and shall furnish all information and reports red by ,.. ,9« and by the rules, Executiv OrderNo. 11246 of September requi o. 11246 of - regulations and orders of the Secretary. of Labor, or pursuant thereto, and will permit access to its books, records and accounts by the City and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations and orders. 20.3 Certification of Nonsegregated Facilities. The Developer certifies that it does not maintain or provide for its employees any segregated -56- i '` cilities ..;n meets, and that it will not permit its employees to perform their services at any The 3t any of its establishments, and that it does not permit its employees perform their serVices at any location, under its control, where segregated , ilities are maintained. The Developer certifies further that it will not "main - provide for its employees any segregated facilities at any of its establish- 0 location, under its control, where segregated facilities are maintained. Oeveloper agrees that a breach of this Certification is violation of the Equal v.:.irturll „j ,iause of this Lease. As used in this Certification waiting rooms, work areas, rest rooms and wash ing areas, time clocks, locker rooms and other g drinking fountains, recreation or enter - "segregated facilitie means any rc ,t , rants, and other eat storage ;or t t j iirEirt c -P sf:�1c cr, I or, re= dressing areas, parkin revs, transportation, and lots, housing facilities provided for employees which are in fact segregated on the basis of race, expli cit. directive ; i •]ion . or national:'ori gi'n, The Developer further or because of habit, local custom or otherwise. agrees that it will obtain identical certifications from. proposed contractors, sub -contractors and managers prior to the award of any rontrects:and that it will retain such certifications in its files. Internal Revenue Code Compliance. The City represents and Developer that the Convention Center as finally constructed shall less than 410,000 square feet and the Additional Hotel Spaces therein wr.rre.nts ti consist 20.4 the of not allocated :to the wh Developer shall not exceed 100,000 square feet, or 25% of the ole,such<that the.City will issuing ti stion which.would cause said bonds to be deemed industrial development bonds or arbitrage bonds as defined in Section 103(b)(c) and Section 103(c)(1), respectively, Internal Revenue Code of 1954, as amended, and the applicable regulations c,t t e thereunder. x free revenue bonds. not be disqualified under applicable law from Neither the City nor the Developer shall take any -57 20.5 Participation in CivicFunctionsat Convention Center. The Developer agrees that it shall annually make available matching funds with the City or the City's designee, an amount not to exceed S100,000.00 for the sponsoring of cultural, civic or other events at the Convention Center which will result in the promotion of the City, the Convention Center and the Hotel. Assignment by Developer. The Developer may not sell, convey, assign or otherwise transfer or dispose of any interest in and to the Demised Premises without of :its right, title and written consent of the City, which consent, the City shall not unreasonably withhold except, however, that the .Developer may assign all or any portion of this Lease including any right of approval the reserved to Developer) as security to the holder of the first mortgage on Demised Premises without consent of the City. approvals, 20.7 Notices. All or other communications notices, demands requests for approvals which may be or are required to be given by either party to the other in writing shall be deemed given and delivered if delivered in person or if sent by registered TO DEVELOPER Miami Center Associates, c/o Worsham Bros. Co. 1401 W. Paces Ferry Road, Suite 2-E Atlanta, Georgia 30327 Ltd. N.W. The addresses to which notice writing delivered to the other party. or is to be certified mail, postage prepaid and addressed: TO CITY The City of Miami City Hall 3500 Pan American Drive Miami, Florida 33133 Attention: City Manager sent may be changed from time to time by a Until notice of change of address is received, a party may rely upon the last address given. Notice shall be deemed given, if notice is by mail, when delivered to the address set forth above, whether or not the letter is accepted or the party to whom it is addressed is in fact then at that address. 1 Provisions` of Law Deemed ,Include d. Each and every provision cf State and Federal law required to. be included in municipal agreements shall be deemed to b i luded herein and this Lease shall be read, construed and enforced as though the same were included herein._ If, through mistake, inadvertence or e nc otherwise, any 'such 'provision oh clause is not included herein or is incorrectly included herein, then,upon application of either party hereto, this Lease shall with be amen forth. 20.9 Invalid Provisions. If any provision of this Agreement is held invalid, the remainder of this Agreement shall not be affected thereby if ded to intlude the` same or to correct the inclusions of the same. such remainder would then continue to conform to the requirements of applicable laws. _ A licable Law and Construction. The Laws of the State of Florida govern overn the validity, performance and enforcement of this Lease. The submission of this document for examination does not constitute an offer to lease, or a reservation of or option for the premises and becomes effective only upon ' e cution and delivery thereof by the City and the Developer. The headings of the s:veral` sections contained herein are for convenience only and do not define, limit or construe the contents of such sections. City and the Developer and the Lease, This Lease has been negotiated by the together with all of the terms and provisions hereof, shall not be deemed to have been prepared by either the City or the Developer, but by both equaly. 20.11 Amendments. The City agrees to make such amendments to this Lease as may be reasonably required by Developer's :first mortgage lender or title insurance in order to make Developer's .interest in this Lease mortgagable and insurable. 20.12 Gender and Number. Words of any gender used in this Lease shall be held to include any other gender, and words in the singular number shall be held to include: the plural (and vice -versa), when the sense requires. 20.13 Award of Contract. The Developer warrants that he has not employed or retained any company or persons to solicit this Lease and that the not paid or agreed to pay any :companyor; persons any fee, commission, Developer.. a. percentage, .,brokerage fee, or gifts or any other considerations contingent upon resul'_i.r frum the award or making of this Lease. The Developer also warrants that to the best of its knowledge belie`' ,a commissioner, mayor orother officer or employee of the City is interested oirectly or indirectly in the profits or benefitsof this job, t.orservices, for the City inconnection with the contract or t iv?" of lh, r -o,iec� ease or the construe" - The Developer is aware of the conflict of interest clause of The City of Miami,. Dade County, and the State of Florida and agrees that it shall fully comply in all respects wiht the terms of said clause. 0.14 Public Park and River Walk. The Premises abuts a public park and river walk area, and the City agrees that the plans and specifications for such public park and river walk shall be completed at the same time the final plans for the Convention. Center are completed by the City, and said plans for the public park and river walk shall be subject to the Developer's examination for his determination as to such plans conformity to the applicable requirements of this lease, which the: City agrees to observe in the preparation of such plans. The ''$ty agrees; that the.. public park and river walk shall be used only for such pur- poses during, the entire term of this Lease, and the City further agrees to complete 1 i the construction thereof in accordance with Section 6.3 in timely concert with the [Developer's completion of construction of the Developer's improvements and; to thereafter maintain the same in a first-class manner. 20.15 Development of Patricia Hotel Site. Should the City develop the improvement and utilization ofthe former Patricia Hotel site, pins Or the Developer and its mortgagees shall have the reasonable right of approval of the des 'jn concept to determine that the same is compatible with the Hotel and does nct in not be any manner interfere with arbitrarily or unreasonably exercised. 20. ment_between City them dated April or harm the same, which right of approval will 16, Approval of University's A1reement by Developer. The Agree- nd University dated April 1, 1977, and Letter Agreement between 10, 1978, shall only be modified hereafter by the City with the a '.;r'tter, approval of the Developer. 20.17 Use of University Space. use for a period longer than six ti= space in the Convention In the event the University shall not months or otherwise shall relinquish to the City Center leased from the City, the City shall cause such used for Conference Center purposes and the parking garage rights of University under such agreement are to be vested in the City for its purpose. Estoppel Certificates. The Developer and the City agree that from time to time, upon not less than ten days' prior notice by the otherparty, each party will execute, acknowledge and deliver to the other a state- ment inrecordable form certifying that this Lease is unmodified and full force and effect, and effect`(orAf there have been modifications that the same as so modified is in full force and effect and stating the modifications) and the dates to which -61- the rent and other charges have been paid in advance, if any, it being intended that any such statement delivered pursuant to this section may be relied upon by any prospective purchaser, mortgagee, assignee of any mortgage or assignee of the respective interests under this Lease, made in accordance with the provisions of this Lease. Clarification of Intent. The fee simple title in and to the the City and any mortgage by the Developer will not extend to said fee simpletitle but only to the leasehold interest of the Developer and the rights of the Developer in the Demised Premises. This Lease shall be further amended to identify the plans and specifications of the City and the Developer when the revisions thereof have been agreed upon and approved by them. At an appropriate time, and any future amendments thereto shall be reduced Developer, this Lease upon request of the City or the single instrument, all to the end that the covenants, obligations and undertakings of the City and the Developer shall repose in a single document. 20.20 Date of Effectiveness of Lease. This Lease contains the entire agreement of the parties hereto respecting the subject matters of this Lease and supersedes all prior understandings, contracts or agreements, whether oral or written, of the parties with respect to such subject matters. This Lease, although dated as aforesaid, shall be effective as of April 20, 1978. All actions, approvals, expenditures and other activities of the parties hereto from April 20, 1978 to August 28, 1979, the date of this Lease, which conform to and are within the pur- view of this Lease shall be deemed ratified and affirmed by the parties, subject to the provisions of this Lease. -62- 20.21 Effect of Failure to Validate Bonds. If for any reason the Supreme Court of Florida shall fail to render a judgement validating the revenue -onds of the -City on or prior to March 1, 1980, or such later date as the parties harcto,shall-agree in writing, this Lease shall then be deemed terminated and no longer effective and the Lease and Agreement for Private Development, executed AFri1 20, 1978, and Supplement No. 1 thereto, executed September 29, 1978, between the City and the Developer shall then be deemed to be in force and effect between .11, parties. IN WITNESS WHEREOF, the parties hereto have set their hands as of the day of August, 1979. ATTEST.: City,Glerk ATTEST: APPROVED -AS TO FORM AND CORRECTNESS George F. knox, 'ity Attorney -6 3- THE CITY OF MIAMI (a municipal corporation of the State of Florida). MIAMI CENTER ASSOCIATES, LTD. A Florida Limited Partnership MIAMI CENTER ASSOCIATES, INC. General Partner APPROVED AS TO CONTENT James J. Connolly, Project Director Director Convention Center