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HomeMy WebLinkAboutM-79-0417TO!'' FROM: • Joseph R.-Grassie City Manager dames a. Confere • CITY 0.' ':11,\ i Conference/Convention Center, Lease and Agreement, Proposed Amendment NIX; �G�.aeutz�s; On March 8, 1979, a presentation was made to the Commission on the "Financial Plan" for providing funds necessary to complete the Conference/Convention Center by means of Lease Revenue Bonds. As part of that submissiOfl were two documents from, the City's Bond Counsel, Brown, Wood, Ivey, Mitchell & Petty.,; The first document entitled "Proposal for Financing Convention Center .Improvements" .dated February 15, 1979, provided a positive legal opinion as to the City's right to enter into such a financial plan in view of the City of Miami Charter and: Code, and the ConstitUtiOfl and Statutes of the State of Florida.= The second document was the "Suggested Procedure for Financing the Convention Center Improvements" dated February 14, 1979, which outlines the procedural steps required in order to obtain the bond financing Resolution No. 79-157, passed at that Commission meeting incorporated those recommendations necessary in order to proceed with the Financial Plan. In proceeding with the development of the Financial Plan it became apparent that in view of the requirements of .the Internal Revenue Service(IRS) Code, Section 103(b), it would be necessary to change certain portions of the "Lease and Agreement for Private Development between the City of Miami: and: Miami Center Associates, Ltd." dated April 20, 1978 and"Amendment No. 1" dated September 29, 1978. In addition, the Construction Lender, Continental Illinois NatiOnal Bank and Trust Company of Chicago has requested several changes in language, butnot substance, to the agreement. The mortgagee, Massachusetts Mutual Life Insurance Co. has requested further clarifica- tion of the "demised premises" and the'bxcepted premises:'., The City Manager's office and the City ttorney have been meeting with, the City's Bond Counsel, the Developer and his counsel in order to formulate a proposed Amendment No. 2 which would: Satisfy, the IRS requirements for tax exempt interest financing Remove any and all considerations of tax credits or abatements from the Agreement Make the above changes without altering the previously commited financial agreement which would negatively impact the developer's mortgage comznitineflt At the same time, incorporate;;, the requested language changes; requested by Continental Illinois Bank, the construction lender, and Massachusetts Mutual Life Insurance Co. the mortgagee. The final draft of the proposed amendment will be distributed to the interested parties and their attorneys this week for a final review prior to being submitted to the Commission for their review and approval. Oi'Je o r r icy LAVENTHOL & HORWATH CERTIFIED PUBLIC ACCOUNTANTS 20LALHAMBRA CIRCLE CORAL GABLES, FL 33134 (305) 442-2000 Mr. James J. Connolly Project Director City of Miami/University, of Miami James L. Knight International Center Miami, Florida In accordance with the terms of our engagement, we have conducted a market study and prepared projections of net operating income and rent derived by the City of Miami (the "City") from the operation cf the James L. Knight International Center (the "Center"), which would be available to repay Lease Revenue Notes (the "Notes") issued by the City to finance a.portion of the cost to develop the Center. This letter presents a summary of our financial projections, subject to final review and revision. A full written report of our market study and the bases of our projections is being prepared and will be submitted upon completion. Based upon our findings and conclusions, we project. that net operating income and rent derived by the City from the Center's operation. assumed to commence on January 1, 1982, will be as follows: Year Projected Income to City $1,157,000 1,555,000 2,006,000 2,414,000 2,638,000 2,862,000 3,100,000 3,357,000. 3,631,000 3,924,000 Included • in these.;projections is operating net income or loss derived from the operations of the City of Miami Civic and Convention Center and a 988 - space parking garage and rent derived from the operation of a 608-room Hyatt Regency Hotel. • , • Mr. James J. Connolly Project Director City of Miami/University of Miami, Jarnes L. Kni ght International Center Consideration has been given to the possible effect of inflation on all sources of revenue and expense at a rate of seven percent compounded annually. These projections are based upon our understanding 0: the terms ofagreements between the City and the University of Miami and the City and Miami Center Associates, Ltd., including changes which have occurred subsequent to the signing of original agreements by all parties. The projections are subject to our final review and revision. We did not ascertain the legal and regulatory requirements applicable to this project, including zoning, other state and local government regulations, permits and •licenses. Further, no effort has been made to determine the possible effect on this project of present or future federal, state or local legislation including any environmental or ecological matters or interpretations thereof. With respect to the market demand analysis, our work did not include an analysis of the potential impact of possible energy shortages. Because our conclusions and financial projections are based on estimates and assumptions which are are inherently subject to uncertainty, we cannot express an opinion that the projected results will necessarily be achieved. June 22., 1979 Slack, Slack & Roe, inc. _ _ _ _ _-___ -------I- I":_ .=_. MAUUR 1620 W. FLAGLER STREET MIAMI. FLORIDA 33135 PHONE 643.0443 June 22, 1979 City of Miam c/o .Mr. 'Joseph R. Graesie. City Manager 3500 Pan.: American Drive Miami, Florida 33133 r" Appraisal #79148 Gentlemen: Pursuant to your request, I have made a careful study of the proposed World Trade Center project, primarilyfor the purpoee;.ofestimating a fair market rental for the air rights on. a 1,500 car garage, . to be erected by the City ofMiami. _n this connection,;I have felt it necessary to '"make an economic study .of the aspects of the thirty -story office building, as well as the garage, which wilt :form "the' base for the office building. It is my opinion that the; fair rental for the air rights, based upon 'the outline of:`the office building to Ye erected, would be THREE HUNDRED THOUSAND DOLLARS (S300,000.00) (Per Year) Net The lease should contain clauses to adjust the rental 'in accordance' with the consumer price index. Your attention is invited to dataand 'discussions following which, in part, form the basis of this conclusion. Respectfully submitted, TWS/da earmideaGef THEODORE W. SLACK, MAI, ASA $,icctaltf!«g Gs earr vote al Ps fottles TABLE OF CONTENTS Purpose of APpraisal Page 1-la 2,-3 Conditions of Appraisal Certification Outline of the Project Analysis of Highestand Best Use for the Subject Site Market Data Land Sales, 12-18 Comments on Market Data 19 Rental and Occupancy Information 20 Comments on Rental and Occupancy Informa- 21-22 tion Cost Approach Comments on Coat Approach Cost Analysis of World Trade Center Economic Approach Economic Analysis 29-3, 8-1 ADDENDA Qualifications of Appraiser Plat of Subject Property Maps Photographs Plat of Pe.ple Mover, SLACK. SLACK & ROE. INC. T. C. SLACK. S.R.P.A.. A.S. A:. M.A.I. T. W. SLACK. M.A.I. - A.S.A. BRUCE C. ROE, S.R.P.A.. M.A.I. 24-25�; 26-27. 28 Fair Rental conference Page APPRAISAL OF AIR RIGHTS OVER THE GARAGE FOR THE PROPOSED WORLD. TRADE CENTER PURPOSE OF APPRAISAL The purpose of this report is to estimate the Value for leasing of the air rights above the proposed center parking garage structure, to be built in accordance with. the outline of the physical characteristics herein. the property D finition.`of Air Rights right Air rights are "real property oonsieting ofthe space above the "earth 'e`Bur face. Real property ie ordinarily subdivided by vertical planes ownership the Zang,, property and space within the planes, legally delineated, extends from the "center of the earth to the heavens". However, Zand, property and space can be legally subdivided by horizontal planes, Air rights become an independent unit of real property such a horizontal subdivision. They compriee a portion the complete fee rights in the land, may be sold or leased, and through as well. of may relate either to public or private Zand areae marketable. The air space above any property is divisible an Even the various stories of_ a skyscraper may be figuratively sliced from the whole and sold separately, segment to be conveyed isproperly described.. SLACK. SLACK &, ROE. INC. T. C. SLACK. S. R. P. A:, A.S.A.. M.A. !. T. W. SLACK. M.A.!. - A.S.A. BRUCE C. ROE, S.R.P.A.. M.A.I. the Page Ia This definition appears to be well accepted by the members of the American Institute of Real Estate Appraisers, delineated by Richard J. , Layden, M.A.I. of Chicago, Illinois is a quotation from the Encyctopedia of Reat Estate Appraieing, Third Edition by Prentice Hall. preparation of this report, with Mr. Walter Kuenhle, M.A.I. of Chicago and Mr. John R. White. or two of ` the best-known authorities in ;appraisal and of iiew in In the as I have consulted the matter of air right evaluations. In addition, I have consul regarding t drawn buildi circles, ted the various trade journals> and, specifically, articles e proper techniques. In addition, of course, I have upon mu own experience in the evaluation of many office ngs in the Miami area, which will forum the basis for the highest and boat use evaluation. SLACK, SLACK & ROE. INC.. T. C. SLACK. S.R.P.A.. A.S.A.. M.A.I. T. W. SLACK, M.A.I. - A.S.A. BRUCE C. ROE, S.R.P.A.. M.A.I. LIMITING CONDITIONS OF -APPRAISAL Information as to the description of the premises, as to the physical features of the property appraised have been submitted by the purchaser of this appraisal and assumed by us to be correct; and from personal inspection and investigation, is believed to be correct by us. Information is on file in our office, 1620 West Flagler Street, Miami, Florida, and is available to person or persons to whom this certificate is issued. Responsible ownership and competent management are assumed. It is assumed that title to said premises, is good and that there are no restrictions as to its' use; and that the description of the premises correctly designates the boundary lines. No survey of said property has been inspected by the appraisers and the appraisers have made no survey of the property and aseume no responsibility in connection with such matters. The appraisal is of the date specified and covers the premises described only. Neither ail nor any part of the contents of this report shall be conveyed to the public through advertising, public relations, news, sales or other media, without toutart the written consent and approval of the author, p y as to the valuation conclusions, the identity of the appraiser or firm with which he is connected, or any refgrenoe to the American Institute of Real Estate Appraisers or to the M.A.I. designation. The values for land and improvements as contained in this report are constituent parts of the total value reported, and neither is to be used in making a summation appraisal by combination of values created by another appraiser., SLACK. SLACK 8( ROE. INC. T. C. SLACK, S.R.P.A., A.S.A.. M.A.I. T.`W. SLACK. M.A.I.-`A.S.A. BRUCE C. ROE, S.R.P.A., M.A.I. Page Either is invalidated if eo used. The current purchasing power of the dollar is the basis for the value reported. The appraiser herein, by reason of this appraisal, shall not be required to give testimony or attendance incourt or at any g0V0rn772eflta1 hearing with reference to the property in question, except as agreed upon. Thie appraisal is presented as a complete, bound report and may be considered valid only so Zong as it is presented in its' entirety and aZZ pages Zisted in the Table of Contents are present. The information identified in this report as being furnished byothers is believed to be reliable but no responsibility for its accuracy is assumed. SLACK SLACK T. C. SLACK. S.R P.A.. A.S.A.. M.A.I. BRUCE C. ROE. S.R.P.A., M.A.I. T. W. SLACK, M.A.I. A.S.A CERTIFICATION Page 3a I have made a careful etudy of`the subject property and have personally inspected same. I hereby certify that to the best of. my knowledge and belief, the statements of fact contained in this appraisal report, upon which the analyses,.opinions and conclusions expressed -herein are baeed, are true and correct. I have no personal interest or bias with respect to the subject matter of this appraisal report or the parties involved. I have no present or contemplated future interest in the real estate which is the subject of this report. This appraisal report sets forth all of the limiting con- ditions (impoeed,by the 'terms of.;my assignment or by the signers), affecting the analyses, opinions and conclusions contained in this report. No one other than opinions and conclusions concerning real estate which are set forth in theappraisal report. the signer(s) prepared the analyeea,. This appraisal report has been made in-oonformity with, and is subject to the requirements of the Code', Ethics and St tute of Real Realtors. Profeseiona`; Standards of Professional Conduct of the American Inati. Estate Appraisers of the National Association of. SLACK. SLACK & ROE. INC. T. C. SLACK. S. R, P. A.. A.S.A.. M.A.I. T. W. SLACK. M.A.I. - A.S.A. BRUCE C. ROE, S.R.P.A., M.A.I. OUTLINE OP" THE PROJECT Page 4 I have been supplied with a conceptual schematic drawing ;`by Architect `I.M. Pei and Partners, dated September 29, 1978, under which it ie proposed to erect a garage, originally to be 988 oars, but:naw expanded to"accommodate "1,500 On top of the garage, which I estimate will require a minimum .of eleven stories, there is to be locateda thirty-etorY office building, which will contain a net useable rental area of 450,000 square feet. This measurement is based upon the building Ownere and Managers Association method of computing office apace and it assumed that the net useable area is based upon open f Zoor computations. ince I do not have firm plane showing size of` intended rather: than whole floors, of this appraisal They are a ollowe: care. is multiple. occupancy dimensions ,`amenities "or specifications, 'fo is necessary to make a number 1. It is assumed that the office the purpose f assumptions. building.will be constructed and planned "in such a manner as to produce "a`minimumof 80% efficiency, which means that the net area of 450,000 squarefeetwill require 562,500 square feet of gross area. It is possible," of course,. that the building could be made more efficient;"however , I believe that between 80% and 84%"ie.probably a satisfactory ratio. SLACK. SLACK 8i ROE, INC. T. C. SLACK. S.R.P.A.. A.S.A.. M.A.I. T. W. SLACK. M.A.I. - A.S.A. BRUCE C. ROE, S.R.P.A.. M.A.I. spaces occu mini and Page 5 2. The specifications of the building will be high grade the office building mitt compete successfully in the amenities with other major downtown office structuree 3. In computing the 450,000 square feet of. net useable this assumes rooms, service provided that the necessary mechanical areas and the air conditioning rooms, will.`be within the gross area. area, rooms, t such as' boiler 4. It is assumed that the access to the offi high-speed elevators from the lobbies and garage, planned to provide first class service. e building by i l l be fficientZy 5. It ie my opinion "that an absolute minimum of 450 car be allocated for the' use of monthly parking by the. pants of the office: building. I realize that this ie a very mum amount and it is possible that it might be necessary to allocate more. office building. space, depending on the type of occupancy in the' 6. As to the garage, which will be.;erected ,'by the City .of this is to accommodate 1,500 care and on the baste of the floor area, is estimated that it will be necessary to construct eleven floors of garage to provide the proper amount of space. 7. There will be approximately 20,000 square feet of retail space on the first and second floors of the garage, which may be bank which will be leasing the air rights rented in part to a major to the upper floor. The cost of constructing the thirty -story; Miami, SLACK. SLACK & ROE. INC. T. C. SLACK. S. R. P. A.. A.S.A., M.A.I. T. W. SLACK. M.A.I. - A.S.A. BRUCE C. ROE, S,R.P.A., M.A.I. 1 Page 6 has been estimated at $37,500, 000 by the architects and their estimators, the cost to be borne by an atr rzghte' lessee., 8. The estimated construction cost of the garage ie estimated' by myself at $15per square foot, including the commercial "space. The garage would require 579,150 square feet, with each floor of',; feet, to accommodate the 1,500 cars and store space. quite obvious that without plans or specifications, there 52,650 square It ie can be considerable building, and the garage and the " variance in the areas neceseary to make the garage efficient and to provide the net income from office building, as'I have eetimated in this Connolly, Project omeprovided of the 'property project"of report. However, after consultation with ;Mr." James' Manager, and a study of the outline of costs and inc to me, it would appear that the highest and best use would certainly be accomplished by the erection of a this sine and character. 9. The cost consultant: has'estimated that the additional cost of construction in the garage for the necessary fo platforms, etc. building, will otings, beams,. o make it possible to erect the thirty-etory office amount to. approximately-$2,500,000. This expense will be borne by the project. In accordance with the attached;pZot plan, there appears to be approximately 60,250 square feet'of land area, with frontages 10. as indicated. I-; am aware that the acquisition of this property>by SLACK, SLACK ROE. T. C. SLACK. S.R.P.A.. A.S.A.. M.A.I. BRUCE C. ROE, S.R.P.A., M.A.I. INC. T. W. SLACK. M.A.I. A.S.A. over a period of years and that there has been considerable enhance- ment in the value of this downtown land since its acquisition. This is particularly true in the case of the subject property b of the most important public, as well as private projects in the immediate area now either under construction or in the planning stage. ecauee I also recognize a considerable pZottage in acquiring over 60,000 square feet in this location under one owner. It is my opinion` that at the present time, in considerationof these factors, the value of the Zand ie $3,600,000, or slightly less than $60 per square foot. Data indicating comparable sales will be found in this repor SLACK. SLACK & ROE. INC. T. C. SLACK. S.R.P.A., A.S.A.. M.A.I. T. W. SLACK, M.A.I. - A.S.A. BRUCE C. ROE, S.R.P.A.. M.A.I. elsewhere • 6 expense analysis of the garage and the number of spaces to be allocated parking for the office building, have "been made. It ie my that these changes are essential to the success of the entire project and thiseffect'ie reflected in the modified income and that the garage and the to each other and that of the garage. I feel office building should be complementary the design of the building should Basically, i fo World Trade Center in this fore the location, tying in with the convention center, hote.i and the very strong development of the downtown Miami business area. be- made toWar d¢ this end. t ie my opinion that the proposal location isan excellent project SLACK. SLACK & ROE. INC T. C. SLACK. S.R.P.A.. A.S.A.. M.A.I. T. W. SLACK. M.A.I. - A.S.A. BRUCE C. ROE, S.R.P.A.. M.A.I. r a o J h R. ANALYSIS OF HIGHEST AND BEST USE FOR THE SUBJECT SITE For purposes of reference, I am including herewith n outline of the entire proposal for the improvement of the ubject site, which proposal has been outlined to me in a copy f a memorandum from Mr. John Connolly, Project Director to Mr. oaep Crassie, City Manager. Since I have been requested Page 8 o make an appraisal; ` of ` the air rights for the purpose of establishing a rental value for the thirty story office buiiding,'I``have .had several intervieWa with the Project Director and others, and it of the value now develops that several changes, particularly as the`else for monthly. opinion a 0 Page 9 feel that it should be possible to develop the property along this on a Bound financial basis, and that the `economic aspects,"' presented herewith, would show a substantial profit for'the as now planned. In addition, they should ,provide a tine With Miami. as as garage, a gateway to South America, I profitable investment for the purchaser of the office building. The following is a brief outiine of the proposal. 1. The City will apply to the U.S. Department of. Housing and Urban Development for an Urban Development Action Grant to the City of Miami, the proceeds of which are projected to be applied in accordance with the attachment entitled Summary• of Proposed Expenditures, Page 40, of. the, proposed grant appltcat on, modifiedto cover the necessary garage changes. 2. Provided the grant isobtained, the private developer group agrees to invest private funds in the approximate amount of $37,500.,000` to build a World Trade Center building consisting of approximately 450,000`square ;feet of net rentable area, of which Dade Federal Savings and Loan will occupy 150,000 square in part feet and the Miami' World Trade feet. This building, ,t of Miami Convention Center parking estate taxa'e Center will occupy 300,000 square o be built ; onair rights over the City garage, will pay full rea SLACK. SLACK & ROE. INC. T. C. SLACK. S.R.P.A.. A.S.A.. M.A.I. T. W. SLACK. M.A.I. - A.S.A. BRUCE C. ROE. S.R.P.A.. M.A.I. ▪ The private developer Page 10. group prepared to pay the. City of Miami an air rights rental of $300,000 per year with appropriate escalation in accordance with coot of living increases (Consumer Price Index) and actual rental increases obtained, by the World Trade Center portion of the buidZing. The initial tease term will be for thirty years with two renewal terms of thirty, f refurbishing Years each with provisions' similar to the provision and updating of the and are ▪ The City agreement with, proposed as follows: air rights structure as contained in the lease Miami Center Associates. -The rental payments,. a • $150,000 per year beginning upon beneficial occupaney`,of the office tower eecalated annually, by the change in the CPI. b • $150,000 per year deriving from World Trade Center leasing activities phased in as follows: (1) $50,000 per annum upon achievement of 50% occupancy. (2) $100,000 per annum upon achievement of 75% occupancy. (3) $150,000;per annum upon achievement of 90% occupancy. (4) " The $150,000 shall be payable in any event after five years from beneficial occupancy. (5) The $150,000 per annum will escalate based upon the actual percentage increase achieved on an annual basis after the World Trade Center portion of the building has reached 90% occupancy. parking garage consultant, Conrad Associates, Inc.'originally recommended 750 parking spaces for the Convention with the addition of the Center and hotel air rights, that the garage will estimate of the garage does no are contain 1,500 spaces. My coat include financing charges, which estimated separately in the economic,aspecte SLACK. SLACK & ROE. INC. T. C. SLACK. S.R.P.A.. A.S.A.. M.A.I. T. W. SLACK. M.A.I. - A.S.A. BRUCE C. ROE, S.R.P.A.. M.A.I. 5 Page 12_ The City does not subordinate its land or any of its investment. to the air rights structure. 6. In the event that the private developer group (Miami World Trade Center, Inc.) determines that they no Longer, choose • World Trade Center, the. City would have right to operate, as a set asides for City first refusal to succeed to the lease and the World Trade Center in order that. the City may continued public purpose in this development. franchise for be 'assured of of the 7. One floor of approximately 15,000.. square . feet will be' of Miami functions.. The City will pay direct costs of construction and operating and maintenance 'costs ,only during the lease term. SLACK. T. C. SLACK. S. R. P. A.. A.S.A.. M.A.I. BRUCE C. ROE, S.R.P.A.. M.A.I. SLACK & ROE. NC. T. W. SLACK, M.A.I. - A.S.A. MARKET DATA - LAND SALES Legal 'Description: Location: Date: Indicated Price: Grantor/Grantee: 0/R:" Size: Indicates:' Zoning: Comments: . LegalDeecripti:n Location: Date: Price:. Grantor/Grantee:; Size:; Indicates: Zoning: Comments Page 12 Lots 11 and 12, Block 125,.MIAMI NORTH, Plat Book B, Page 41, Dade County,,Fla. 135 South Miami Avenue July, ;`1978 $585,000 f_-r. fee Robert"Revitz t: Florida Propertiee, Inc. 1018 21 785 12,500 `Sq ". Ft. $46. 80/Sq 'Ft. "C- 3 " The purchaser reports that it was necessary to pay an additi:nal amount for ;;two existing leases on the property, plus;"a commission, which would bring the indicated price to over double the recorded price. Since this was for a specific purpose, i.e. building already leased t..: the Federal Government, it would appear that the total price was substantially above the market. Due to the peculiar requirements of the building and the small size of the land, the floor area ratio was over 14 to 1 on this sale. Tract D of DUPONT PLAZA, Plat Book 50, Page 11, Dade County, Fla. Northwest corner of Biaeayne Bay and Miami River and fronts on Biscayne Boulevard. Contract - scheduled closing, June, 1978. $23,000,000 DuPont Trust to'HollyWell Corp. 8.45 Acres $62.48/Sq.Ft. "C- 3 This is considered to be an excellent downtown property` and ie_the, site of a proposed $115,000,000:complex, including a 630-room luxury hotel. Options on other lands. SLACK. SLACK & ROE." 'I NC: T. C. SLACK. S.R.P.A., A.S.A.. M.A.I. BRUCE C. ROE, S.R.P.A.. M.A.I. T. W. SLACK. M.A.I.-'A.S.A. IIIIIIII11111IIIIIIIIIIUi 1 1 Page 13 . Legal Land Sales - With Improvements of Interim or Small Percentage Value only Description: Location: Date: Price: Grantor/Grantee: Size: Indicates: Zoning: Comments: 4. Legal Description Location: Date: Price: Grantor/Grantee: -Size: Comments: • Indicates South 50 feet of Lots 9 and 10 and all of Lote 7, 8, 13 and 14, Block 103, MIAMI NORTH, Plat BookB, Page 41"," Dade County, Florida East side of NE 2nd Avenue "between NE let and NE 2nd Streets. September, 1978 $1,255,000, Robert L. Greene t S 35,000 Sq. Ft. $35.86/Sq. Ft. Paraiatiy improved with .old hoteiof no value. Property. is, located northeast of subject ` in an inferior iocati_'n as compared to eub�ject.' Lots 1-7, Block 119, MIAMI NORTH, Plat Book B, Page" 41,' Dade County, Fla. South aide of NE 1st Street between Biscayne Boulevard and NE 3rd Avenue. December, 1978 $5,400,000 City Bank to Fine 290' x 200'. = 58, 000 Sq. Ft. This property is improved with the Columbus Hotel and McAlister Hotel. The McAlister is: not being used and will be demolished. The Columbus, a 300-room hotel, may also be removed so the entire block can be rebuilt with new office/hotel highrise. Presently, the Columbus ie being repaired and painted and has some interim value. $93.10/Sq. Ft. SLACK. SLACK 8c' ROE. INC. T. C. SLACK. S.R.P.A.. A.S.A.. M.A.I. BRUCE C. ROE, S.R.P.A.. M.A.I. 0 Marvin Cassel T. W. SLACK. M.A.I.- A.S.A. Page 14 Legal Desoription:: Date: Price: Grantor/Grantee 0/R: Land Size: Improvement Siae: Indicates: Parcel 1: Lots 17 and 18 and the west 50 feet of Lot 1 and the south 50 feet of Lot 4, Block 118, also alleyway 10 feet in width on Lots 1, 19 and 20, described as the south 3 feet of Lot 1, less the west 50 feet thereof, and the north 7 feet of Lots 19 and 20; <`also alleyway 7 feet in width over Lot 4, 'described as the east 7 feet of Lot 4, less the south 50 feet thereof, known as Paramount Building. Parcel 2West 43 feet of north 100 feet of Lot 4, known as Bradford Hotel. Parcel 3: East 100 feet of Lot 1, also known as a portion of the Calumet Building. AZ/ parcels in Biock 118, MIAMI NORTH, Plat Book B, Page 41, Dade County, Fla. North side of East Flagler Street to the south side of NE 1st Street, between NE 2nd and NE 3rd Avenues. July 28, 1977. $3, 300, 00.0 Miami Caribe, Inc. to Argen-Florida Corp. 9758/22 294700 Sq. ; Et. 44,581 Sq.Ft. Land and Building - 5111.11/Sq.F Improvements - $74.02/Sq. Ft. Lot '"1.if) improved with a 5,976 square foot building constructed in 1919 and assessed at $28,130, with a`Zand assessment of $120,000..The ,south 60 feet of Lots 17 and 18 are improved with a 22,500 square foot building constructed in 1919 and assessed at $119,746, with land assessed at $462,000. The north 80 feet of Lots 17 and 18 are improved with a 16,085 square foot building constructed in 1923 and assessed at $112,502 with land assessed at $299,754. The west 43 feet of the north 100 feet of Lot 4 isunimprcved with an assessed value of $172,000. This property is being renovated into a downtown shopping mall known as Galleria and white the improvements were completely renovated, they were ;not a eubstantial part of the purchase Price. SLACK SLACK T. C. SLACK. S.R.P.A., A.S.A.. M.A.I. BRUCE C. ROE, S.R.P.A.. M.A.I. & ROE. INC.` T. W. SLACK, M.A.I. A.S. A. Legal Psscription 0/B: Date: Grantor/Grantee:. Price: Size Location Indicates: Comments:` 9. Legal Description: Location:`. Date: 0/R: Grantor/Grantee:' Price:; Size: Indicates: Adjustment:: Cornmente : Page 26 The :north 25' of the south 75' of Lot 11, the West 5' of the North 25' :of eouth 75' of Lot 12, the North 25' of south.50 feet of Lot 22, and the -North 25' of eouth 50' of West ';5' -of Lot 12, `Block. 121,: MIAMI NORTH, Plat 'Book B, Page 41, Dade County, 'Fta. 10203/122 November 1, 1978 Trustee The ;,Bank_ of Miamito Nathan <Rok, $255, 000 2, 750 Sq. Ft. 25,feet.�north of SE let Street, 'eaet side of 'SE 1st Avenue. $92 73/Sq.Ft." Vacant. Very small, ,'corner ,property indicates very high square foot price. Begin at X of E/L Ave. D/S Miami -Ave. & , S/L14th St./SE 2 St./E 70' S. 124' W 70', , N 124' to POB South Southeast corner of intereection of Miami Avenue and SW 2nd Street. November 3, 1975 9248/861 S.E. Miami Corp. to Federated Dept. Stores $270,000 8,680 Sq. Ft. $31.00/Sq.Ft. Time adjustment (40%) =S43.40/Sq.Ft. Srna Z Z parcel`. -Buildings were , recantly razed. SLACK. SLACK & ROE. INC. T. C. SLACK: S.R.P.A.. A.S.A.. M.A.I. T. W. SLACK.' M.A.I. - A.S.A. BRUCE C. ROE, S.R.P.A.. M.A.I. Legat`bescription Location: Date: Grantor/Grantee:' Price: Size: Indicates Comment: Legal Description: Location: Date: 0/R: Grantor/Grantee: Price: Size: Indicates: Comments: 12. Legal Description Location: Date: 0/R: Grantor/Grantee Price: Size: Indicates 13. Legal Description:'. Location: Date: 0/Rr Grantor/Grantee: Price Size: Indicates: Page 17 Lots 11 and 12, Block 125, MIAMI NORTH, Piat Book B, Page 41, Dade County, Fla. 135 South Miami Avenue August 8, 1973 8408/1760 Herald Fabrics $165,000 5,579 Sq. Ft. $29.62/Sq.Ft. This .is;a prior sale of our Sale 1 and • indicates an increase of 58% in the 5-year period between the two sales, or almost 12% per year increase in value. Lot 4, Block 126, MIAMI NORTH, Plat Book B, Page 41, Dade County, Fla. South side of SE 1st Street, approximately 150 feet west of SE 2nd Avenue. November 1, 1976 9504/1837 Graham C. Miller to Allright,Miami, Inc. $115 000 5,600 Sq. Ft. $20.54/Sq.Ft. Very small parcel ineide ,.lot. Time. adjustment of 30% indicates $26.70/Sq.Ft. Lots 13 and 14, Block 126, MIAMI NORTH, Plat Book B, Page 42, Dade County, . Fla. North side of SE 2nd Street@ NE1st Ave. May 30, 1973 8310/753. AZbury Bros., I Inc. $ 4.50,000 12,500 Sq. t $36/Sq.Ft Lots 6 and; 15, . B Zock 126, MIAMI NORTH, Plat=Book -B, Page .41, Dade County, Fla. Adjoins Sale 12, above. February 19, 1974 8599/1773 Willard R. Brown and the.l"t National Bank of Miami to UZtramount. Properties, Inc. $430,000 F 12,500 Sq.Ft. $34. 40/Sq. Ft. nc. .to Ultrarnount SLACK, SLACK & ROE. INC. T. C. SLACK. S.R.P.A.. A.S.A., M.A.I. BRUCE C. ROE, S.R.P.A., M.A.I. Propert• ies, T. W. SLACK. M.A.I. - A.S.A. now 14. Legal Description SLACK. T. C. SLACK. S.R.P.A.. A.S.A.. M.A.I. BRUCE C. ROE, S.R.P.A.. M.A.I. Page 18 Lots 8 through 12, Block 126, MIAMI NORTH, Ptat Book B, Page 41, Dade County, Fla. Adjoins Sate 12. June 30, 1973 8310/752 Trans European PropertiesUttramount Properties, Inc. $1,2.50,000 Sales 12, 13 and 14 produced an assembled property, including the Columbia Building, totalling 56,250 square feet at a total price of $3,408,000. The buildings on Lots 6 and 13 were demolished. For a time adjustment, we require 10% per year or an increase of 60% from the original acquiring price of $2,130,000, to $3,408,000. This computes to $60.50/Sq.Ft. considering the Zand value only. The two-story Columbia building is almost 50 years old and does not really produce enough net income to justify its existence, so that I consider this represents land value only. ROE. INC. T. W. SLACK. M.A.I. - A.S.A. COMMENTS. ON 'MARKET, DATA I am aware that the acquiring price forthe convention center was substantiallybelow market value due, in part, to the $4,000,000 purchase of the Peter Feinberg property at approximately $20 per square foot. Feinberg considered that the'difference between fairmarket value and the sales price would be considered as a gift to. the City of Miami for the project. I feel that with the convention center closeto realization, and the great aotivity in the downtown area during together with the proposed projectsnow value of $3,600,000 for the land truly the 60, 250 square feet included in the the past several years, on drawing boards, the reflects, the value of, subject property. It less than $60,per ,square foot and that enhancement from plottage is included retail should in this figure. be noted that this price ie slightly Sales 4, 5,6'and 7 are obviously much superior locations than the subject but are included for the purpose o ndicating the very active market in the downtown area at this time. SLACK. T. C. SLACK. S. R. P.A.. A.S.A.. M.A.I. BRUCE C. ROE, S:R.P.A., M.A.I. L SLACK & ROE. I' N C T. W. SLACK. M.A. A.S."A. RENTAL AaD:OCCUTA.VCY; INFORR'.-1TI0.V Dcv in tmin .M:.r• i "a' : iu :cke l l /1tYcnue S . Ft. ,`'q. Ft' ` tfost °Recent Nr.:e/L ocati on Leaser-1 lc l'Vcc.nt Fental 1 Biscayne, Dcvntcvn 600,000. clone $12-$15/Sq.Ft. First Federal, Dcuntown 418,400 None $10Plus Flagler Center, Downtown 150,000 12,000 $11-$13 Older downtown buildings including Concord, City National & Biscayne. Are above ;95% occupancy > th rates from $8.50- 10.50 Rivergate, 444 Brickell 210,000 - None . $13.50-$14.75 888 Brickell 26,500 None $12.50 1000 Brickell 153,000 4,500 $12-$12.50 Brickell `Plaza, ,909 SE 1st Ave. 122,000 Some small $10-$11 sub- leases 1101 Brickell" 144,000'' None $10.50 Citizens ;.Federal, ".999"Brickell 112,000 None $12-$12.50 Br•ickell Concourse, 1401"Brickell 182,000 None $13-$14.50 1 1111111111111111111111111111 COMMENTS ON RENTAL AND OCCUPANCY INFORMATION It will be noted that the range of. first 'class buildings downtow currently runs from $10 to $15,per square Toot. Th n office rentals have been rapidly increasing• , past two to three years and, in my opinion, will continue to advance for the next two years. It ie difficult to predict the beyond two to three years, as it depends .on'.nationai. level y. affair ie my the a, inflation, competition" and other factors.However, i`t° opinion. that the subject property, with first class and ample parking, should bring a rental of $15. specifications per square foot o based n a multiple occupancy schedule. This ¢rules and utilities, which e oot. It is square foot price includes janitor s should total in the neighborhood of;$1.50 per equar f proposed that ,the subletting of the thirty -story";ofrice building should be be paid rented on the basis of utilities and janitor service, r by the subtenants, with escalation clauses tied to the Consumere"'Price Index. to For purposes of"comparison,"I have used the, $"15per square foot gross schedule. I am quite aware that there are several methods of computing net useable area of.which the multiple occupancy method is the most conservative. Some of the. newer SLACK. SLACK & ROE. INC. T. C. SLACK, S.R.P.A.. A.S.A.. M.A.I. T. W. SLACK. M.A.I. - A.S.A. BRUCE C. ROE, S.R.P.A.. M.A.I. • of is only area. used ot. • Page 2t); e buiZdings use the New York method of computation in which the vertical openings are deductible from the net useable This results=in a rate of 11% to 12% higher than the method • SLACK. SLACK T. C. SLACK. S.R.P.A.. A.S.A.. M.A.I. BRUCE C. ROE, S.R.P.A.. M.A.I. COST APPROACH Garage, 1,500 _cars @ 350 Sq.Ft./Car _ " 525 525, 000;"Sq. Ft." @ $15/Sq. Tt. (Includes ramps and drives) Stores & Pedestrian Malls, etc. (Including 20,000 Sq.Ft. of store space Additional 'Costs Streets and Site Improvements -- Water & Sewer- Clearing & Demolition". Roof Garden - Foundation, Platforms and Structural Features for 'Cons truction of 30-Story Office Bldg. Present`' Value of Land 60,250 Sq.Ft. @ $59. 75/Sq. Ft. - Interest During' Construction $1,050,000/Yr. x 2 Yre. Lei" '` Mortgage - Estimated Equity - $325,000 300 000 625,000 ,875, 0.00 000 000 3,600,000 $15,873000 SLACK. SLACK & ROE. INC..' T. C. SLACK. S.R.P.A.. A.S.A.. M.A.I. T. W. SLACK M.A.I. - A.S.A. BRUCE C. ROE. S.R.P.A.. M.A.I. COMMENTS ON COST APPROACH also garage at pedes trio listed Page; 24 The , estimate of the cost of construction of the $15 per square foot, plus the extras for the stores, n malls, etc., plus additional epxenees, as has been arrived at insofar as the garage proper 1'8 concerned, as my own "estimate after consulting with the various additional additionaZ building indexes and many' of our appraieals. The items have been included and have been supplied by the Project Director, Cost Estimator and the Downtown Parking Authority. increasing the project constructed The figure attempts t:-" take >i costs which may be necessary due t nto account the inflation, should be delayed. The garage, proper could probably be o eighteen months, whereas the large fifteen office building, be conetructed on the leasehold rights, would. take a longer period - perhaps two years. I believe (i difficult to operate the garage very successfully during t period construction of the e building.` would b Ae to the economic aspects of the garage, I have borne in mind that the. financing,'`as outlined by the Project Director, would be at a rate 'substantially: below the available rate for mortgage money for."private induetry.. SLACK. T. C. SLACK. S.R.P. A.. A. S. A.. M. A.1. BRUCE C. ROE, S.R.P.A.. M.A.I. SLACK ROE. INC. T. W. SLACK; M.A. . A: S; A. • that Page 2`5 In the finalanalysis, however, it voutd appear a 10.46% return, ae, estimated, from the garage and leasehold rent, is an adequate return 'on the equity. I am aware of, the fact that the acquiring price of the land is considerably than the amount represented by the considerably less than th less estimated current fair market value, eo that the actual investment above the mortgage, would e estimate herewith.,: Thie would,. of course,reeult in a considerably higher rate of return on the ttetual equity.' In arriving at these figures, it. must be borne in mind that there are not, yet, any detailed plans or specifications' of the garage, eto there ore have been forced our experience, together with the Director and other sources.' be rea; lobbies an d`so forth and, rely on general: figuree.'from SLACK, SLACK & T. C. SLACK. S.R.P.A.. A.S.A.. M. A:1. BRUCE C. ROE, S.R.P.A.. M.A.I. igures supplied ROE. by t e Projact I'NC. T. W. SLACK, M.A.I. = A.S.A. Page COST ANALYSIS OF WORLD TRADE CENTER .THIRTY -STORY , OFFICE „BUILDING TO BE CONSTRUCTED ON THE AIR RIGHTS .OVER TIE 1;500' CAR . PARKING GARAGE ON SUBJECT SITE The building is to;oontain '450,000 square feet of net rentable office area. This computed, on a multiple occupancy basis and should allow space for service 'areas ,,equipment rooms, etc. Assuming a minimum. efficiency of net ueeable area at 80%, the groan area of the building should be 450,000 square feet divided by .80, or 562500 square feet.In the absence of Z•. plans = and ; specifications, I- am using the-cost.estimate eupp d ze to me by the Project Director, of $37,500,000. Thi,e computes to per square foot, which includes an allowance of foot for interim parking. Additional costa are to be lessees. I assume that this includes the so called "hard" $66.66 square by the $5.00 per borne rent up time, costa, as well as estimated interest on investment, etc, which aro commonly known as "soft" costs. 'It is my opinion that this building could probably be conetructed for substantially Zees if plane and specifications are efficient and Practical.' This, obviously, wouldreduce the cash investment in the building outlined in the proposal supplied tonne by the Project Director. SLACK. SLACK & ROE. INC. T. C. SLACK. S.R.P.A.. A.S.A.. M.A.I. T. W. SLACK. M.A.I. - A.S.A. BRUCE C. ROE, S.R.P.A., M.A.I. costs of foundations to support the thirty story office been computed at $2,500,000, This, o which supp •platforms extra necessary which cost is to be borne by. the City.. course, is a savings in the cost of the office building, ortc my opinion that the square foot price might' be substantially SLACK, SLACK & ROE. I`NC.` T C. SLACK, S.R.P.A., A.S.A.. M.A.I. BRUCE C. ROE, S.R.P.A„ M.A.I. T. W. SLACK: M.A.I. - A.S.A. 1 1 INCOME ECONOMIC APPROACH 450 0,00'Sq.Et. @ $15/Sq.Ft. Lees Vacancy. and Lose Allowance EffectiVe Income EXPENSES '(Estimated) Taxes. - 450,000 Sq.Ft. @ $ (Building Oniy) Fire & Extended Coverage Liability on $30,000,000 @ $1. 2 0 Manaaement(3%)'.- Utilities 450,000 Sq.Ft. @ $1. 0 5/Sq• Ft. ` - Janitor Services & Supplies @ $.45/Sq.`_Ft. ~ - Repair & Maintenance, Air Condition ing, Elevator & General - Security. - Miscellaneous. - $1/Sq.Ft Total Expenses Net Income - $4,638,125` 450,000_ 36,000 192,375 472,500 202,500 375.,000 36,000 10 . 0.00 Page 28 6, 750_,.000 337, 500 412, 500 1. 774, 375`** Sinking Fund Recovery 30 Yra. @ 6%: Factor .01265 4R4 375 .01265 x $37, 500, 000 4, 163, 75500 , Estimated Air' Rights Rentall - 300000• Net Return on' $37,500,000 (10.3%) " This inaludee utilitiee and janitor rentals to contain consumer price o Zauaes . "" Computes to T. C. SLACK. S.R.P. 3.94/Sq.F s ervi c e by Lessor. A 1, l adjustments and tax -stop; SLACK. SLACK & _.ROE, INC. A.S.A., M.A.I. T. W. SLACK, M.A.I. - A.S.A. BRUCE C. ROE, S.R.P.A.. M.A.I. occupancy, foot which Page ECONOMIC ANALYSIS As to the estimated rentals obtainable for. multiple it is my opinion that an average of $15 per should be,obtainable `'by the time of completion of is estimated at approximately two years. 1 am quite familiar. with .�urrent the specifically, 'n Flagship Bank buildi run square the building, rentale.in Dade County as a whole and,. downtown area. Current rentals inthe new ng now under construction on Brickell Avenue, from'$12 to $15 per square foot, except r ground floor spaces. 7 aminformed that this is already 70%, The Biscayne building runs ;from a low 'of,$10.50 per square foot for some older leases to $15 per square It ie approximate;ly 90% building runs from $ Zie rented at this time. 'oot for the upper .floors. he First Federal 9.50 to $13per square foot'and has to 75% pre -rented. a waiting Generally,. through Brickell Avenue and downtown, the occupancy rune. from 95% to 97% at this time. I have copies of a eurvey made by the Clark Bionei Company, showing the foltowin Average ''Downtown Occupancy` June, 1977 - 85%`z: June, 1978 92% June, .1979 - 95% SLACK.' T. C. SLACK, S.R.P.A.. A.S.A.. M.A.I. BRUCE C. ROE,' S.R.P.A., M.A.I. SLACK & ROE. 'INC.. T. W. SLACK. M.A.I. - A.S.A. age'; 3 This study also shows rentals advancing @ 10% to per year, tsith expenses advancingfrom 6% to 9% per year. The present situation shows an unusua11y'tight office building This is a complete reversal of the situation in 1974 and The determined efforts of the public authorities, ae well 12% market. 1975. T private businesses, have served to revive the downtown area and stimulate great activity in building, remodelling and retail as trade, ae well as o f rice use. Latin America Influences of the Edge Act Banks, encouraging n trade, in my opinion,. has been and wiZZ continue to be an important' influence in the growth of this area. I am aware of many projects on the drawing boards, improvements,on Bali Point, at least:three new buildings such as on Brickell Avenue and a.eoneiderable nuMber of decentralised projects. Just announced is a possible 700,000 square: foot building to be`erected by the Southeast Bank Corporation and SE 2nd Street. Cautions.han made been by.eueh authorities Hunter Moss, against overbuilding. It ie ve"ry difficult to predict how many. of"the proposed projects wilt go forward It that with the downtown convention center and holes d h ype of business to be created by th the an'alysie herei,Jith ehoutd be office office BrickeZZ_Avenue my complex clone by, an t e t World Trade Center projeot, obtainable if T. C. SLACK. we Z Z planned. SLACK'. SLACK & ROE., A.S.A.. M.A.I. BRUCE C. ROE, S.R.P.A.. M.A. NC.` at such as 8 T. W. SLACK. M.A.I. - A.S.A. Page 31 that the thirty -story office building will be purchased for all cash by a major banking institution;;."which will occupy a substantial amount of apace for its own use. is • note the particularly excepti One of the a most expensive items in a large 'project the time and expenses required to obtain financing. In the of this `office building, ae outlined to me, thie wiZZ no't case neceeeary, be. It would appear, therefore, that the proposed rental of 0300,000 net per year for the air rights, is well jusitfied by the economic aspects of:the ;proiec • SLACK, SLACK & ROE, INC. C. SLACK. eM.A.I. T. W. SLACK. M.A.1,.- A.S.A. T C BRUCE C. ROE, S.R.P.A., M.A.I. .Addenda UALIFICATIONS OF APPRAISER- THEODORE W. ' SLACK, MAI, ASA EDUCATION:. Graduate, Tufts College, Boston, Mass.,; AB Degree Graduate work, Suffolk Law School and Boston Universit, Boston, Mass. EXPERIENCE: 3 Over fifty years experience in sales, management, leasing and appraising of at/ forms of real estatein lJew England and in Florida. .Qualified in Superior Court in Hartford, Connecticut and in Miami, Florida;also various district and circuit courts. AFFILIATIONS AND OFFICES HELD:' Past President, South Florida'Chapter, Institute of; Real Estate Management Past President, Hartford, Connecticut and Miami, Florida Real Estate Boards Past Vice President, National Association of"Reai,Estate Boards Past Vice President, Amerioan Institute of. Appraisers, South Florida Chapter Past Member, Board of Governors, Florida of ReaZtore Past President, Senior Member and Director, American. Society of Appraisers' Instructor of Appraising, Federal Savings,d Loan League Associate Director, Miami Chamber of Commerce Civic. Affairs Committee, 1955 Director, Inter National Bank of Miami; of Miami) Resident of Miami, Dade County, Rea Z Association (Royal Estate. Trust Bank Florida ;since. 1943. 'SLACK, SLACK 8c :ROE. T. C. SLACK. S.R`P.A.,'A.S.A....M.A.I. BRUCE C. ROE. S.R.P A.. M.A.I. NC. T. W. SLACK.. M.A.I. - A.S.A. t. ‘•=111z60•CMOr'il/imo•,.A2mom ,i ' ;••i "iI 11J'"I I ,1 114:.1•'.IA:.Fr.i' yJ �1 • I .. 1_.1 y. _�1 I/:_.., 1 I • irtft ' 1,1. �, �•1.1 I•�.1.1 1.1 ftWT �a�. •'•, , •:.' i . . • gal -- l� -T,•1 •}•: ,`•1, rri._i•!f., I•I•L.I .3,j ,;..�1. I_.i�R''1�t•I'li. 'J�.J�.'i�i. • • I,�+ ` :�r+s 1 I i1 rl'� .i, I'li 1 I•i. .I.rf`'�1 + 11 ,•, '11.16.. •.•4.•1 11.I :1 W i 11' 1. • • . ,1 .i •• I•I •I t i ��''atig rl y.� •ll � :1 • •Ir+Yr ,,1 rr OTTICL • 1 _ .1. : ra 110M { _ 1...--. t—i ` .Ir .LI.; lie ...le r .1\161' t. S„ • ( 1.1 1 ,' • 1 fa E• 'I r ,•. •'f ^.:.i 0, . —4.1 . IL 1 I, a' -' it -i-7 , 1 n u�ai :�' •�.-« 1S `. .--.-+�-,,,.,,„,„."TTT In..,141., n .Ir.l•lo;�. {' h•..r.' • , t,. .'� i •IRY.C/Y►'I-s I 1 ( I ,J 1 I ,I!��. �''' •.`'�::r W • P.L. ' tit[. 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'8.4 0 CD k N A TL 6 A S•1 BLD (.3 • _ _ • F5\ IST N • E s; 0 1.1 1 1 , Oa` P. nI �I Ct SBLDIGI. N,� .E 5 rill 5 1 0 a i -•111ri .JT4}ice h III a 1 Q i Iti Q 1 ' II I W :� S I,I ',.IA I (t'. 1 ?.- _ L.11 L,1z._ iD 1 /:O itili.F ' I ti iV ^i �i M ,^ sr �. _�1u PLAZA BLDG._.`. !r Q.S 1- Z 1./. 411 Nt15_ '• 4� 25 ZS I SO_ .SO a I :v. :1 'O 1 I"y 1< Ir ) 1 h. I IQ I O; • `qM 1 N I INW _ 1 ..\ t71 Im IQ�I j 14 1 -r 6 • '1 • % I z 4W i. �� �I a.c , I� 1 t97 J 11 LL l / PKG.. %.. Ili l /�T MP /6 T i 1 % J a. i„ i SPIRAL Z o �c: '•G h st FED. BLDG. RTERONE Si ►s3 NAT'L CITY BANK N. E 3rd. ST. N.E 2nd ST N. E. 1st ST. _ _ D P M - - MAINTENANCE • FACILITIES • • _ • • 17 4r RAPID )i- 0000 - .....-------- TRANSIT ,r-- - — 4- I NE-• g • u --- / MIAMI DOWNTOWN PEOPLE MOVER STAGE I S. E. 2nd. ST. - ADD:EtiN [ .1 BISCAYNE BOULEVARD WAY r 11111:011••••••••=1111111111111111•101111111111•111111111=111111111.11111.1111111.11.11111"1"1"..1.111.1me = 4001 C TELEPHONE I3OS1 443-7446 LEONARD A. BISZ REAL ESTATE SERVICE ESN PONCE DI.LEON BOULEVARD SUiTE 410 CORAL GABLESo FLORIDA 33134 June 22 f' 1979 City of Miami p..0. Box 33708, Coconut Grove Miami, Florida 33133 Attention: Mr. James J. Connolly Project Director Convention Center Re: APPRAISAL OF AIR RIGHTS WORLD TRADE CENTER SITE Gentlemen MEMBER AMERICAN'INSTITUTE Or RtAL tsTATE APPRAISERS In accordance with your instructions I have prepared an appraisal report on the Air Rights on the World Trade Center Site in Downtown Miami. My report is transmitted to you herewith. If you have any questions concerning my report, please do not hesitate to call upon me Respectfully yours, ATTACHMENTS LEONARD A. ,`BISZ., . A . • VALUATION SUMMARY AND CONCLUSIONS Fair Market Value of the Land (60,256 Sq. Ft.): $ 3750,000.00 Highest. and Best Use of Property High-rise Office Building, with Municipal Garage in lower levels Estimated Net Cash Flow From Operation of Parking Garage After Amortization of Bond Issue - Estimated Return on Office Tower Building Lessee after Air Rights Lease Payment is - Fair Rental of Air Rights with Municipal parking garage at lower levels Per Year Fair Market Value of Air Rights $3,500,000.00 to $3,750,000.00 Inasmuch as there are special benefits to Air Rights, Lease. Opinions expressed herein are without benefit o detailed drawings. LEONARD A.,:BISZ.'M.A.I..;REAL ESTATE APPRAISER AND, CONSULTANT: • 1 340,666.00 a 300,000.00 i • PURPOSE OF APPRAISAL The Purpose of this appraisal is to estimate the Fair Market Value of the Air Rights over the proposed World Trade Center Parking Garage Building and the Fair Long -Term Rental Value of said Air Rights. Air Rights are defined as "The right to inclusive and undisturbed use and control of a designated. air space within the perimeter of a stated land area and within stated elevations. Such rights may be acquired for the construction of a building above the land or building of another, or for the protection of the light and air of an existing or proposed structure on an adjoining lot". LEONARDA. BISZ, M.A.1.. PEAL ESTATE APPRAISER AND CONSULTANT P. ( 8-41 ) UNPLATTED 6 AMENDED PLAT OF A PART OF FORT DALLAS PARK (4-85) • R/W LINR S R -85. r•ir7C-10. SURVEY OF PROPERTY (SHOWING GROSS AREA - BEFORE ALLOWING 5' FOR S. E. 2ND STREET AND 10' FOR S. E. 1ST AVENUE C5,5,33.4, i11 • re!..." ...... etX11 11,..s.z44:4, , r i -- .........::: • . A • _ ... .1.%7.1k .;•."AMTI.- 1,00.1"--.--"------------151-- ....'i'l:S • 7:77' . ';..: 1 : . , • % :.0'... pa. _ ', -1).*, .1 AERIAL PHOTOGRAPH LOOKING NORTHEASTERLY 9-3-75 LOOKING SOUTHERLY AT SUBJECT PROPERTY IN FOREGROUND AND THE SITE UI HYATT REGENCY HOTEL AND KNIGHT CONVENTION CENTER NORTH SIDE OF MIAMI RIVER LIMITING -CONDITIONS OF APPRAISAL. The appraiser herein certifies that to the best of his knowledge and belief, the statements con- tained in this appraisal, subject to the Conditions of Appraisal, as set forth below, are correct; also that the appraisal has been made in conformity with the Rules of Professional Ethics of the American Institute of Real Estate Appraisers of the National Association of Real Estate Boards. The property has been appraised as though free of liens and encumbrances, in responsible ownership, and under competent management. No responsibility isassumed for matters legalin nature, nor is any opinion of title rendered. Good title is assumed. Both legal descriptions and dimensions are taken from sources thought to be authoritative; however, no responsibility is assumed for, either unless a survey, by :a competent engineer, has been furnished the appraiser. The appraiser has no present or contemplated future interest in the property appraised, and the. compensation for making . this, appraisal is in no manner contingent upon the value reported. The physical conditionof the improvements, if any, has been based onvisual inspection. No liability is assumed for the soundness of structural members since no engineering tests were made of same. LEONARO A. IIISZ. M.A.I.. REAL ESTATE APPRAISER ANO CONSULTANT 'QUALIFICATIONS OF APPRAISER LEONARDA. BISZ, M.: A-. I Resident of Miami Dade County, Florida, from 1925 to 1932, and since 1946. Actively engaged in appraisal o real estate for over 30 years. • President of the South Florida ,Chapter No. 24, American Institute of Real EstateAppraisers.in1958 and* also 1967. Member of Ainerican'Society of Appraisers, and the. American.. Right of<Way Association.: Registered real estate broker and member of the Miami Board of National Association of. Read Estate 'Boards Approved appraiser, for various government agencies, including the Veterans Administration, General Services Administration, U. S. Navy, U. S. Corps of Engineers and Federal Aviation Agency. Appraise for, the Board of Public Instruction of Dade County, Florida, and the Board of County Commissioners of Metropolitan Dade County. Appraise for mortgage lending institutions, attorneys, accountants, bank and trust companies, public utilities and railroads. Qualified in court as expert witness in Circuit Court o Dade County, U. S. District Court in Jacksonville and also Miami, Florida. Territory includes other than South Florida, the Virgin Islands and Puerto Rico and also the Bahama Islands., Appraise on"occasion property in various other States. LCONARD A.BISZ. M.h.1.. nria. ESyATr AlMoRA$S[R ANO CONSULTANT i LLJit+utr 11V1.I OF PROJECT • DESCRIPTION OF PROJECT LAND - The land is located in the westerly haif of, the block atiendin„ g from S. E. First Avenue to S. E. Second Avenue, from S E. 2nd Street to 5. E. 3rd Street. Survey is attached .hereto and made a part of this report. TheEgrond s area is 63,971 Sq. Ft., and after deducting Street right of way and 10 ft. for S. E.- 1st Avenue moreright less. Of way, the net area is estimated' at 60,256 Sq. Ft., Street frontages are as follow: 240.00 Ft. M/L, 251.00 Ft. M/L. 246.54 Ft. M/L Net Frontage on S. E. 2nd Street Net Frontage on S. E. 3rd Street Net Frontage on S. E. 1st Avenue S. E. 3rd Street ends just east of subject property. as the Limited Access Right of ea st ofrthetsoutheasterstate 5cornereof the Connector begins 32.49 ft. subject property. NEIGHBORHOOD - The property is located in the close -in Downtown Miami area in the fast developingeFort d by Dtlls-Dupont plaza section. The area has been s e improved business activity and the expansion and construction of the City of Miami Convention Center southerly. High-rise office buildings and hotels are in the planning stages, together with substantial modernization and alterations on downtown commercial structures. Flagler Street is two blocks northerly of the subject property. On the south side of the Expressway on the north side of the Miami River will be the location of the Hyatt Regency Hotel next to S. E. 2nd Avenue, and the Knight Convention Center wester- ly of the Hotel. Parking for both facilities will be in the subject garage as well as the parking for the office structures above. SUBJECT IMPROVEMENTS - On the land comprising 60,256 Sq. Ft., more .or mess, will -.be erected a multi -level public parking garage to accommodate 1,500 cars, more or less. The west half of the first two floors, about 30,000 Sq. Ft., per floor, will be finished interior for stores, parking garage offices, lobby, hallway, elevators and escalators. The easterly ground floor will be parking entrance -exits to both S. E. 2nd Street and S. E. 3rd Street. The garage is designed for .north -south parking lanes and ramps. LEONARD A. RISE. M A $.. REAL ESTATE APPRAISER AND CONSULTANT DESCRIPTION OF PROTECT Continued) The proposed Downtown People Mover will have a Stationat the southwest corner area of the building, which with the. Airport Bus Terminal will be advantageous to this property and the tenants therein, parking, stores and offices. The original concept was for 988;cars, which would have 5 levels of parking over the first two floors of lobby and mezzanine and 8 levels otherwise including the ground level. This design would have air rights "platform" or level at 86 ft. above street The revised current provision for 1,500 cars would require. about 3.6 levels more, which at 10 ft. floor to floor would indicate air rights platform beginning at 116 ft. to 126 ft. above street grade. Any excess space could be used by the Office Tower Building for mechanical and equipment space. The total parking levels would be 11 to 12 levels, just slightly higher than the parking in the One Biscayne Tower Building. The Office Tower Building is designed for 30 floors, some- what triangular in shape and containing 15,000 net rentable Sq.'Ft. of space per floor. ' Because of the special design and shape an efficiency ratio, of 80% may be estimated for the structure, indicating. a gross area per floor of 18,750 Sq. Ft. Gross floor area .for 30..floors is 562,500 Sq. Ft., with net rentable area of 450,000 Sq. Ft. The:Office TowerBuildinghaving 562,500 Sq. Ft. and; the;; Garage structure having 60,000 Sq. Ft. finished area, the total is 622,500 Sq. Ft. Land area is 60,256 Sq. Ft., M/L. The Floor Area Ratio (enclosed area ratio of land area) is 10.33 Sq. Ft. to 1 Sq. Ft. This Floor Area Ratio of 10.33 to 1 is about average for Downtown Miami., One Biscayne Tower is about 17.to?1, the First Federal; Savings & Loan Building is 8.92 to 1, and other office buildings are 10 to 14 to 1. • The Project is being designed by I. architect. The size and shape of the total structure is reasonable; however, the parking ratio of1 space for each 300 Sq. Ft. ; of rental space may indicate or appear to be "out of balance". The garage will have demand for its space because of the nearby Hyatt Regency Hotel and the Knight Convention.Center for which it is also designed to serve. Neither S. E. 2nd Street nor S. E. 1st. Avenue are wide thoroughfares. (Continued) LEONARO A. BtS2. M.A 1.. REAL ESTATE APPRAISER ANO CONSULTANT an outstanding DESCRIPTION OF, PROJECT (Continued) ECONOMIC FEASIBILITY Financial data, operation, costs and lease terms are attached hereto as contained in Memorandum entitled, "Basic Terms, World Trade Center Plans, Letter of Commitment of Dade Federal Savings & Loan Association of May 29, 1979, and Financial Concept Memorandum dated March 3, 1979." This appraiser has included in his approach to valuation of both the and office tower building, an "Economic garage Basis" as well as "Cost Approach Basis". LEONARO A. UISZ. M.A I.. REAL ESTATE APPRAISER AND CONSULTANT 1 N 1 4 th. ST. N. E 3rd. ST, Ni 2nd. ST EAST FLAGL ER STREET • : DPM-- MAINTENANCE--- FACILITIES . • r. t;4 RAPID r. TRANS' T/. rit 1 1 L-J 1 ??:?wlid".1.1r0"mulommor MIAMI DOWNTOWN PEOPLE STAGE I BISCAYNE BOULEvARD w.X $ =400 MOVER lot 02 90 a fCOit AL 14171. 4 L sh•INt$014 PIMAOCKI PA —r-- 99. 0 I iAlAULCIVait PAP* 02 INGINIA KEY CIANDOM LOCATION MAP ACV IIVICA1.11 I ::.L::AT ION PROCESS VALUATION PROCESS The purpose of this appraisal is to (1) estimate the fair market value of the air rights over the proposed World Trade Center parking garage structure to accommate 1,500 cars, more or less, and (2) to render an opinion as to the fair long-term rental value of the air rights. The principle involved in air rights may be expressed in terms, of the value of the land before and after the taking of the`. vertical access layer. It is based on a consideration of the added cost of, : or the savings in, construction as well as the reduction in economic value of an improvement erected on air rights compared with that of the same improvement if erected on unencumbered land. Alternate ways of expressing this are as follow: A How much will it cost to make the airspace useable? How useable :will it be? Does the use of other levels in the total property contribute to or detract from the optimum enjoyment of subject air space in other words does it contribute to the highest and best use of the total property? The higher the degree of "compatibility " of the levels of "space" working in harmony with the highest and best use of the property,` the closer the sum of the market values of the interests approaches the fair market value of the property as a whole. The highest and best use of the subject site is for a high rise office building with adquate parking facilities within the structure. The design of the proposed structure is in accord with the highest and best use', and simply apportions the garage portion and office tower: structure. Both parking facilities and office space are in demand in Downtown Miami, thereby making this an economically feasible proj LEONARD A. DISZ. M.A 1.. REAL ESTATE APPRAISER AND CONSULTANT Short Term A11 Day Monthly Hotel Guests (24 Hours) Hotel Guests. (Overnight) Short Term (Evening) All Day (Weekend) Short Term (Weekend) Special events Total projected Income Adjust, To 1,500 Space Garage 152% APPRAISER'S ESTIMATED PROJECTED INCOME (g88 SPACE GARAGE BASIS) (1979 DOLLARS) (Day) 200 x 2.25 x $1.25 day x 250 days = 540 x 4.00 day x 250 days =' 200 x $50.00 month x 12 months 50 x $4.00 day x 300 days = 50 x $3.25 day x 300 days 80 x $1.00 day x 250 days 100 x $3.25 x 50 150 x $1.20 x 50 Rounded Out Use $ 140,525.00 $ 540,000.00 $ 120,000.00 $ 60,000.00 48,750.00 20 000.00 16,250.00 9,000.00 4,000.00 $ 958,625.00 $1,457,110.00 `$1,457,000.00 Average Income Per Space $971.00 space/year $ 81.00 space/month $ 3.68 space/day (22 day month) Note: Based on parking rates currently in existance at 150 S. E. 2nd Avenue, Miami. 80 per day vs. this.. projection Note: One Biscayne Tower charges $. of $4.00 and Burdine: s Gaarage charges 650 per hour project herein. ADJUST FOR INFLATION 1980 Dollars+7.5%annual inflation 1981 Dollars 7.5% annual inflation $1566,275.00 $1,683,745.00 Store Rentals 1st floor and Mezzanine` 200 000.00 10,000 Sq. Ft. 1st F1. @$20.0.0 Sq..Ft. $. Ft. �1 Ft. _ $175,000.00 10, 000 $n� � @.$17� 50Sq.-Ft. � _..�. 20,000 Sq.—Ft. Total $375,000.00$ Total Gross Income Garage and Stores LEONARD A. BIS2. M.A1.. REAL ESTATE APPRAISER AND CONSULTANT 375. 000.00 1 832 000.00 APPRAISER'S ESTIMATED ANNUAL OPERATING EXPENSES (98S SPACE GARAGE BASIS) Staff Cost Manger 1 @ $12,000.00 Cashiers 5 @.,$10,000.00 Cashiers (part-time) 2 @ $ 5,000.00 Maintenance Man 1 @ $ 9,600.00 Bookkeeper 1 @ $10,000.00 Sub -Total Payroll Taxes,+Etc. Total Personnel Cost Contractural Services Security Elevator Maintenance Parking Equipment Maintenance. Telephone Electricty' Water Miscellaneous Maintenance Other Expenses Uniforms ana Laundry Tickets & Expendable Miscellaneous Supplies year year year year year Total estimated annual operating cost. 1,500. Garage 152% d: Insurance .. talestimated annual operating cost Adjust To Ad Ad To Note: $12,000.00 $50,000.00 $10,000.00 $ 9,600.00 $10,000.00 $91, 000.00 $ 6,400.00 $44,000.00 $14,000.00 $ 4,000.00 $ 1,200.00 $30,000.00 $ 2,000.00 $ 4,000.00 $ 98,000.00 $ 99,200.00 $ 1,200.00 $ 4,000.00 $ 2,000.00 $; Rounded Out Use 7 200.00 $204,400.00 $310,688.00 $ 35,000.00 $345,688.00 $346,000.00 This land and building owned by :the City of Miami that will°operate the garage, consequently exempt from real estate taxes. LEONARD A. OISZ. M.A 1.. REAL ESTATE APPRAISER AND CONSULTANT SUMMARY - INCOME ANALYSIS PARKING GARAGE AND STORES Gross Income From Operation Garage and Stores Less - Operating Expenses Net Projected Operating Before Amortization or Funding Requirements For Repayment Cost. Of Structure $12,000,000.00 Principal and Interest 23 Years 7.875% Interest >v Annual Constant .095445 Indicated return on "Equity" of $4,875,000.00 (which is difference between total cost of Project of $16, 875, 000.00,,and bonded indebtedness' of $12,000,000.00 being amortized). is about 7%. However, $3 acquisition 750,000.00 of the $4,875,000.00 is is expected to total $1,871,000.00 346,000.00 0.00 334.00 340,666.00 "Land Value!' which more or less. On owner's cost basis of $1,125,000.00 above acquisition costs of. $1,871,000.00 the equity is $2,996,000.00 with return of 11% thereon. LEONARD A. OISE. M.A.1.. REAL ESTATE APPRAISER AND CONSULTANT APPRAISER'S ESTIMATED COST PARKING GARAGE (COST APPROgCftj Building; Improvements (A) 1, ;06 Spaces ki 350 .. Sq. Ft. Per Space is 525,000 Sq. Ft. for car parking at $15.00 Sq. Ft. ) Add for `Stores and Lobby for 2 floors in West 1/2 of Building is 30,000 Sqe Ft. per Floor or 60,000 Sq. Ft. total @ $25.00 Sq. Ft. Total Normal Cos (Includes architect and engineer fees) Add - For special foundation and column structure to support air right platform and Office .Tower and elevator shafts, Etc. (As per Architect's Estimate) (Seenote below) Miscellaneous Items Total Building Costs Land Cost - Current Valuation (Not acquisition cost) Interest Costs During Construction 11/2. Years Assuming Bond Issue Interest 8.75%, which if deposited returns 5`, , average on balance Total Costs Note: Cost of special foundation, columns, Etc. air right platform and office tower are theoreticallypart of cost of the Office :Tower Building. LEONARD A OISE. M.A 1.. REAL ESTATE APPRAISER AND CONSULTANT 7,875,000I 1 500 OOC .9,375,000 • $ 2,500,00C. $11,875,00C $... 125,00C $12,000,OOC 3,750,00C 1,125,OOC 16,875,000 APPRAISER'S ESTIMATED PROJECTED INCOME OFFICE TOWER BUILDING Estimated Annual Gross Income 450,000 Sq. Ft. Net Rental Area Multiple Occupance @ $12.50 per Sq. Ft. (With Taxes and Insurance by Dade Federal Savings & Loan Assn.) Gross Rental Income Less 5% Vacancy Net Effective Income Less Expenses Operating Expenses $3.55 per Sq. Ft'.<< Excluding Real Estate Taxes & Insurance (Taxes & Insurance Paid by Lessee, Dade Federal Savings & Loan Association) Net Before; Depreciation, Estimated Real Estate Taxes on Building Only. 65% of $30,000,000.00 @ 33.086 = $645,177.00 USE Total Effective Net Operating Income Sinking Fund Requirement To Recapture $37,500,000.00� Sales Cost 35 Years 6%. Safe Interest Factor .00897 Net ?Before Allowance Air Rights 'Rental Air Rights Lease Rental° Net For Return on Investment 10%, More Or Less LEONARO A. BISZ, M.A 1.. REAL ESTATE APPRAISER AND CONSULTANT $ 5,625,000.00 $ 281,250.00 $ 5,343,750.00 1,597,500.00 3 746,250.00 695,500.00 4,.441,750.00 336,375.00 ,105,375.00 300, 000..00 "805,375.00. `APPRAISER'S ESTIMATED COST APPROACII OFFICE TOWER BUILDING Building Improvements 30 Story Tower Type Structure With 15,000 Sq. Ft. Net useable Per Floor @ 80% efficiency is 18,750 Sq. Ft. per floor or total 'of 562,500 Sq. Ft. Project Estimate is $37,500,000.00. To Include total cost, including fees is $66.67 per Sq. Ft. Appraiser's Estimate Building Tower Proper 562,500 Sq. Ft. @ $52.50 Sq. Ft. Special platform, design, in garage structure Elevator shafts, piping, Total Costs columns miscellaneous (Including Fees) 9 531,250.00 2500 500 000.00 000.00 32 Costs - Financing During Construction 15% $ 4 Rounded Out Use Less That Allowed For Special Foundation, Etc. Garage Construction Appraiser's Estimate.-: Cost Approach LEONARD A. BISZ. M A 1.. REAL ESTATE APPRAISER AND CONSULTANT 531,250.00 879,750.00 37,;411, 000.00 37,400,000.00 2 500,000.00 34 900,000.00 , 0'00, 000.00 Ai/L `, 1 LAND VALUE LAND VALUE Land values in the Downtown Miami area have increased steadily in the .past three years with the revitalization of. business. This hasbeen due in partto the expanding economy and also to the growth of the areaas a financial and shopping. center. Rising office rents along with the growing space is reflected in the higher land values. Sales of property on East.Flagier Street in 1976-1977 were atprices : of $75.00 ` to : $85.00 ' per square foot for inside parcels and.are now at $100.00 or higher per square foot. Reference is made to Sales No. 6A:.and 6B of this report of the Ponce de Leon, Hotel Property and the Paramount Hotel Property under Sale No. 12. Closer to the subject property is Sale No. 10, a small pieceof land at 29 S. E. 1st Avenue. This sold on November 1, 1978 for $92.73 per square foot. Sale No. 11 at the northeast corner of South Miami Avenue and S. E. 2nd Street sold in July of 1978 for $46.40 per square foot on a gross area basis or $50.88 per square foot on a net area basis. This sale excludes the purchase of any tenant lease. The sale':was a delayed closing for which some allowance should be made. These sales, together with the activity in "Ball Point", the contracting for 3 blocks in the duPont Plaza, and the announced 40 story office building of the Southeast Banking Corp., on the last remaining block in the duPont Plaza, show that in the reasonably near future there will be substantially more business and commercial activity conducted in the Downtown Miami and consequently a lessening of supply of vacant land. Zoning in this neighborhood is C-3, which has no required parking on site, nor subject to severe height limitations. Hence,. with the high Floor Area Ratios, the land is more productive and consequently more valuable. The land area of the subject property is 60,256 square feet, more or. less. The estimate of the fair market value with corner influences, and the awareness of the Downtown Convention Center project to the south becoming a reality, is $62.50 to $65.00 per square foot, which is $3,766,000.00 to $3,010,640.00 or say $3,750,000.00 to $3,900,000.00. ESTIMATED FAIR MARKET VALUE ;(LAND) $3,750,000..00 LEONARU A. BISZ. IA A REAL ESTATE APPRAISER AND CONSULTANT SALES DATA )N S0 1J Q N.W. 1ST• W. FLAGLE,P. I-! U i 1 iL_ II i 2 it /.,___1`.., \ r. r\ 11 i / 50� 1pl l i lii 1 r , =— r / 1 IJii Il ill ,/ V 1 II I. -- 'e l Imjl la III 1j ; is 1 I 10 II li I I ill I N - 1-, (1 1: 1 III Ei 1 IY i :IJ Ii 1.1 III 1 I lil K: Z l:; 1 r_ (�. MEMORIAL •v • I eye i. uea�av LEONARD A. 1 /.. SEAT N6 AREA ** Y A'. FRONT PARK BAND SFjt.L1- MIAMI, FLORIDA • SALE RECD Sole No 1 DADE County SUBDIVISION FT. DALLAS PARK AMENDE PB 4/85 SEC, TWP. RGE. OR�= 9822 PG. 49 KIND `, W . D. DATE 10-5-7.7 GRANTOR Magnuson Corporation ADDRESS GRANTEE City of Miami ADDRESS LEGAL: Lot 36, Ft. Dallas Park. Amended, Plat Book 4 Page 85 SIZE 8 AREA: <50'x100' F. Ft. x 5,000 Sq. Ft . " M/L N W Corner of S. E. 2nd Avenue. and S. E. 4th Street. STAMPS: State $ 855.00 Surtax $ 313.50 CONSIDERATION: $285 , 000. C IMPROVEMENTS:, None LESS IMPROVEMENTS $ ZONING: C-3 Central Commercial LAND ONLY: LAND - UNIT PRICE: Per F. Ft. $-57.00Per Sq. Ft. $ Per Acrc Includes corner influence and negotiation' allowance. Asking price 2 years earlier. was $50.00 per Sq. Ft.; Current Land Value indicated approximately $65.00 t $67.50 per Sq. - Ft LEONARD A. DISZ. M.A.I., REAL ESTATE APPRAISER 6 CONSULTANT 0 SALE REC SUBDIVISION Ft. Dallas Park Amen tie d=4785 SEC. TWP. RGE. 9826 PG. 22118 KIND \V. D. DATE 10-11-77 Patricia Hotel of Fla. Inc. and Phil iLKeidaish and Burton ADDRESS It. Levey Florida City - of Miami ADDRESS Ft. Dallas` Park Page 85 126 S. E. '2 Street, Miami, SIZE & AREA: 50''x95' M/L F. Ft.; x 4,750 Sq. Ft. M STAMPS: Stole $ 1._7.02 _50 Surtax $ _624.25 CONSIDERATION: IMPROVEIMPROVEMENTS:.i12 S. E. 2nd Avenue, Pat iric . _ a Hotel- :32,900 Adjusted Sq. Ft. $567,500.0 Per F. Ft. $ Per SqFt. $ Per Acre Side 9-14-75 OR 9153/88'8 for $330,000.00, ",$69.45 per Sq. Ft. Land and Building., Assessed Value: Land` $ 76,000.00 Improvements $279,306.00 Total $355,306.00 Building was in process of being renovated because of violations. Sale atthattime indicated land value of $45.00 per, Sq. Ft. and Ih!preciated Value of building at $3.30 Per Sq. Ft. per floor The sale to City of ".Miami 10-11-77 for $567, 500.00 indicated a phi ox ima tc ly $52 .50 ' per - Sq . Ft. for the land,, and $6.00 . per Sq. Ft: dcpreciated value for, the ;"building " plus an r,allowance for cgquipment and furniture, and negotiation allowance. Current Land Value approximately $62.50 to $65.00 per Sq. Ft. LEONARU A. I3ISZ. M.A.I.. REAL ESTATE APPRAISER & CONSULTANT t the time of sale. Too old SUBDIVISION Sole No` OF., MIAMI TWP. RGE. November 1, 1972 CITY SEC. NORTII ADDRESS Roosevelt C. Houser,Pres. ADDRESS and John J. Price 1/3 °Interest Clyde Court Apartments - 3. story building SW corner of S. E. 2nd Street and S. E. 1st Avenue (metes and bounds description and includes part of 'FEC Railroad ilb..SALE REC GRANTOR Clyde Court Apt. -Hotel, Inc. GRANTEE John V. Howard 2/3 Interest LEGAL: SIZE &.AREA:, 149.6. ft. x 123.52 ft. and, 10 ft. x 149 "ft. STAMPS: Store ZONING: 950 ; Sq. Ft. Ili/I LESS IMPROVEMENTS 450,000. Per F. Ft $ '22 .56 Per Sq. Ft S Land and Building Sale appears to be below the market. to adjust for comparability. LEONARD A. ©ISZ, M.A.I., REAL ESTATE APPRAISER & CONSULTANT Per Acr SALE RECD SUBDIVISION Salo No. ° 4 (A) City of ° Miami B/41 SEC. • TWP. RGE. GRANTOR Trans -European Properties, ADDRESS Inc GRANTEE Ultrnmont Properties , Inc. ADDRESS LEGAL: ' Lots "S to 12 inclusive. Block 126N, City of Miami, Plat Book B/41 100x125' SIZE & AREA: 150x112.5' IMPROVEMENTS: CONSIDERATION: $1 , 250 , 00( Part 2 story stores and lofts, SE "1st Ave.` $ 42.55 PerSq.;i Land and Building LEONARD A. BISZ, M.A.I.. REAL ESTATE APPRAISER 8 CONSULTANT Per Acr SALE REC MIAMI, FLORIDA Sole No. 4 (B) DADE County SUBDIVISION City of Miami B/41 SEC. TWP. RGE. OR 8310 PG. 753 KIND W.D. DATE 5-30-73 GRANTOR_Albttry Bros. Inc ADDRESS GRANTEE Ultramont Properties,; "Inc. ADDRESS LEGAL: Lots;13 & 14, Block 126 N, City of Miami Plat Book B Page 41 SIZE & AREA:100x125' . Ft. x 12,500°Sq. `F STAMPS: -tote ' •S 1 , 350.00 Surtax 495.00 IMPROVEMENTS:" 119 S. E. 2nd Street, former Alhambra Hotel ZONING:' C-3 CONSIDERATION:$450 ,000. t LESS IMPROVEMENTS LAND ONLY: LAND - UNIT PRICE: S Per F. Ft. $ 36.00 Per Sq. Ft. Per Acr Land and Building Combination (A) SE 1st ` Ave, & SE 1st St. frontage $42.55 Sq. Ft. (I3) SE 2 St. frontage .: ; $36 .00 Sq. Ft. Total average $1,700,000.00 $40.60 Sq. Ft. Totalarea 41875"Sq. Ft. Currently not on the market, but $100.00 per .Sq. ;Ft.;has beenquoted as the asking price. Reportedly turned down" offer of $1,000,000.00 profit;` almost a year ago, or $60.00 to $64.50 per Sq.Ft over-all average. LEONARD A. BISZ. M.A.1., REAL ESTATE APPRAISER 8 CONSULTANT DADS County OR 4-15-76 9299 PG, 211 KIND W. D. DATE Hoke T. Maroon ' ADDRESS GRANTOR _.ADDRESS GRANTEE Ralph°F. Pelaia, Trustee ADDRES5 LEGAL: That part 'of.Block "127.lying W of. SE 3 Avenue, less the N ;102.5of the W 135', thereof, and also :less, the SALE RECCOS SUBDIVISION SEC, Sole No: North ," City of Miami 25/75 TWP. RGE. E 125' thereof. A/K/A Ingraham Parking Garage. SIZE & AREA: 91 .9'x100.1' . F. Ft.. x and 137.6' °x 226.9' Surtax= IMPROVEMENTS: 5 story parking garage with some stores. Gross floor area building 200,485 SF, erected 1945.'" Adjusted SF as per Tax Assessor 99,999 SF LESS IMPROVEMENTS ZONING: C-3 LAND -UNIT PRICE: St. 31,221'Sq.F 2,200.00 .48 Per Sq.> LAND AND BUILDING.' Subsequently transfered to Greater Miami Federal:S,&: L,.;4/76, OR 9310 P 1591 same price. Since purchase and expiration of lease to APCO the building has undergone .extentive clean up. Sale Price $2 , 000, 00.0.00> Less Dep. .Value of Building $ 500, 000.00 $2.50 per .Sq. Ft. Leaves to Land ; $1, 500, 000.00.' $37.11 per Sq. Ft. average overall -'Total 40.420 Sq. Ft. CONSIDERATION: $ 2 , 000, OOC Per Acre Allocation: Value As of Day SE. "1st ` S t . frontage SE 2nd Ave. frontage SE 2►id St. frontage of Sale 9,199 Sq. Ft.` 18,576 Sq. Ft. 12,645 Sq. Ft. $50.00 Sq ; Ft. $50.00 Sq. Ft. $30.00 Sq. Ft. Current Value adjust for 3 'years 8.5% per year is 26% or basically $62.50 to $65.00 per Sq. Ft. South side of property not pavticularly desirable. LEONARD A. DISZ. M.A.I.. REAL ESTATE APPRAISER & CONSULTANT SALE RECc& DADE County, Sate NO. SUBDIVISION CITY OF MIAMI NORTH SEC. TWP. RGE .. OR 10082 PG. 2081 ' KIND Warranty Deed DATE June 30, 1978 Florida National Bank & Trust GRANTOR Co . ADDRESS C/o William Castrillo. - 4th F1. GRANTEE Moonstone Investments N. ° V. ADDRESS 1840 Coral Way, Miami, Florida LEGAL: Lots 14 and 15, Block 118 North, City of Miami Plat Book B, Page 41 SIZE & AREA100 ft. x 140 Ft. _ 14,000 Square Fee STAMPS: State $4,350.00 239 East Flagler Street, Ponce de Leon Hotel LESS IMPROVEMENTS LAND ONLY: IMPROVEMENTS: Surtax ZONING: er: F. Ft. $ 103 .57 Per Sq. "Ft. _ "$ Land and Building Building 76,122`adjusted Sq. Ft. erected 1923 Assessed Value;, Sale Price. $1, 450, 000 .00 Less Depreciated Building Value .$ 400,000.00 LeavoS TO LAND $1,050,000.00 - 14,000 Sq. "Ft. LAND'- UNIT PRICE:, • LEONARO A. ©ISZ. M.A.I., REAL ESTATE APPRAISER & CONSULTANT 595.0"0 CONSIDERATION: $1 , 450, 000 . Per Acre $570,150.00 75.00 Sq. Ft SALE REC DADS County SUBDIVISION SEC. TWP. RGE. OR 10408 PG. 1051 KIND WD DATE May 30, 1979 GRANTOR Moonstone Investments N.V. ADDRESS Jaime Saleem GRANTEE Angelo Gugliotto, Trustee Same as 6a - Lots 14 and 15, Block 118:North, City of Miami LEGAL: B/41 ADDRESS c/o Hector J. Tate Subject to existing mortgage (original amount $1,150 STAMPS: State IMPROVEMENTS: 239 E. Flagler St. $.6,870.00 Surtax $1,287.00 Ponce de Leon Hotel ZONING: LAND - UNIT PRICE: 000.00) CONSIDERATION. _$2,290,00C LESS IMPROVEMENTS $ er F. Ft. $ 163' 57 -` Per Sq. Ft. $ Land and Building Sale Price` Less, Depr. Value Building?'. Leaves To Land Sale details not verified - appears high) LEONARD A. BISZ, M.A.I., REAL ESTATE APPRAISER & CONSULTANT Sq. Ft. Per Acre SALE RECO(*) DADS County Sole No. SUBDIVISION CITY OF MIAMI; NORTH SEC. TWP, RGE. 9982 : , PG, 195 . ' KIND Warranty Deed DATE March 22 , 1978 GRANTOR James W. Dickey ADDRESS GRANTEE Castropol Building Corp. ADDRESS ` 2238 N. 1V. ;7th S .., Miami LEGAL: Lot 13, Block;118 North, City of Miami Plat Book ''B,,Page 41 SIZE & AREA: 50 ft. x 140 ,000 Sq. Ft. STAMPS: State . $ 2 025,.00 . Surtax $ 547.80 CONSIDERATION: ;.$ 675, 000.0 3 story building 219-223E. Flagler St., with lst floor IMPROVEMENTS:: te-iTafitS of Florsheim Shoes, and Burger -King Restaurant LESS IMPROVEMENTS $ ZONING: LAND - UNIT PRICE: LAND ONLY: Per F. Ft. $ 96.43 ` Per Sq. Ft. $ Land & Building Building Adjustment current market indicates $85.00 to $90.0 LEONARD A. DISZ. M.A.I...REAL ESTATE APPRAISER & CONSULTANT .$ 1 I" II 1111.. 1 Per Acre per Sq. Ft. SALE REC DADS County OR 10036 PG. 929 kIND Sole No 0 SUBDIVISION CITY Or MIAMI - NORTH SEC. • TWP. RGE.• Warranty Deed DATE May 15., 1978 GRANTOR'_Wometco Enterprises, Inc. ADDRESS GRANTEE Puerta de Las Americas , LTD ADDRESS 2628 Biscayne Tower, '` Miami LEGAL: All of Lots 5 and 16, and East .04 ft of Lot 6, and West 15 ftof Lots 4 and 17, Block 117 North, City of Miami B/41 SIZE 8 AREA: „65 ft. ,x 290 F. 18 850 Sq. 'Ft. M/L 65 ft. on. East Flagler Street and N. E...1st Street (Block to Block) STAMPS: State $ _5, 250.00 Surtax $ 1, 925. 00 CONSIDERATION: $ 1,750,00( IMPROVEMENTS; Miami Theater witk Stores - '141 F' P1agler Street 2 story, M/L LESS IMPROVEMENTS $ ZONING: LAND ONLY: $ LAND - UNIT PRICE:. $ Per F. Ft. $ PerSq.,Ft.' $ Per Acre 44,864 Sq. Ft Adjusted, erected 1947 Assessed Value $329,880.00 Sale 'Price $1,750,000.00 Less Depreciated Value Building - $ 540, 000.00 ($12.00 Per Sq. `Ft . $538, 50( Leaves TO LAND , $1,210,000'.00' $63:66 Sq.'Ft. average overall or.: Land Value Allotted: East Flaglcr Street "frontage 9,100 Sq. Ft. M/L @ $82.50 SF M/L N. E. First Street frontage - 9,750 Sq. Ft. M/L @ $47.00 SF M/L Financing by Capital Bank @ 10% Interest Mortgage Adjustment to Current Market indicates about $90.00 .to $95.00 per Sq. Ft. LEONARO A. BISZ. M.A.I.. REAL ESTATE APPRAISER & CONSULTANT • SALE RED DADECount County Sale No. SUBDIVISION CITY OF MIAMI - NORTJ SEC. TWP. RGE. OR 9987 PG. 781 KIND Warranty Deed DATE March '28, 1978 Betty Jane Ogden Garvey & GRANTOR Dorothy & L. G. Wright ADDRESS. GRANTEE S..G..&-;S., Inc. ADDRESS 0 "N V V. 2nd StreetMiami LEGAL: Lots 19 and 20, Block'104, North, City of Miami Plat Book B, Page 41 SIZE & AREA: 0 ft. x 150 3.,500'Sq. Ft. Northwest corner NE 2nd Avenue andNE st'Street STAMPS: ` State $3,075. 00 Surtax $ 1,127.50 CONSIDERATION: $ 1,025,0C 2 story Buildings - Stores on NE 2nd Ave & IMPROVEMENTS: narking garage on west side Itpner floors for 12.5 cars ZONING: LAND - UNIT PRICE: Building Per F. Ft. $,75.93 Land and Building LESS IMPROVEMENTS' LAND ONLY: Per Sq. ,111 adjusted Sq. Ft. erected 1950. Sale Price Less Depreciated" Building' Value':. Leaves TO LAND $1,025, 000 0,0 S Per Acr Assessed Value $161, 024.00 $ 253, 00.0.00Stores .@ $15.00 : Sq. Ft. Garage @ $7.50 Sq. Ft. 772,000 0 Adjustment to Current Market indicates • $57.19 sq Ft. _ M/L (Including Corner Enhancement) 62.50 Sq. " Ft . , More or Less 13,500 S LEONARD A. BISZ, M.A.I.. REAL ESTATE APPRAISER & CONSULTANT SALE READ 10 DADE County SUBDIVISION SEC. TWP. RGE. OR10203 1KIND 21 WD 11/1/78. PG. DATE . GRANTOR_ The Bank of Miami ADDRESS GRANTEE Natan Rok, Trustee ADDRESS 72 E. FlaglerSt. Miami, Fla. LEGAL: N 25 ft. of S 75 ft. of Lot 11; W 5 ft.: of N of Lot 12; The N 25 ft. of S 50 ft. f t , ot> W 5 f t .. of Lot 14, of Block 121 North, City of Miami, Plat,Book.B, Page 41 (subject to & N.25 ft. of S 50 mortgages) (29 SE 1 Ave.) 0 ft. x.55 SIZE &'AREA: Vacant Land 29 SE 1st F. Ft. Avenue, north o 1st. Street STAMPS: State 5 765.00 Surtax $ 166.65 CONSIDERATION: $ IMPROVEMENTS: None. - vacant land LAND UNIT PRICE: $ 92.73 Confirmed sale. High unit value shallow depth - active retai:' LEONARD A. I3ISZ. M.A.I.. REAL ESTATE APPRAISER 8 CONSULTANT 255,000. Per Ac SALE REC D MORTGAGE , Soie No. 11 SUBDIVISION CITY OF MIAMI - NORTH TWP4 RGE. OR 10.1102 PG. 1743 KIND MORTGAGE DEED DATE July 20, Properties, Inc. Mortgagor: Florida East Coast / ADDRESS Tibor Hollo, Pres. Mortgagee: Robert Revitz ADDRESS. 1978 LEGAL: Lots 11 and 12, Block 125 North, City of Miami B/41 Purchase Money Mortgage $440,000.00 @' '1% over primerate of SIZE &"AREA: 100 ft. x 125 Ft. 12,500 Sq. Ft. M/L (Formerly Hopkins Carter Hardware Co. STAMPS: Store S Surtax $ CONSIDERATION: $ IMPROVEMENTS:. Vacant Parking Lot ` at Northers' corner of S .° E. Second Street and South Miami Avenue ZONING: LAND UNIT PRICE: LESS IMPROVEMENTS $ Per Ac: Closing of sale confirmed with R. E . Broker at ` $580, 000 .00, which is $46.40 Sq. Ft. Broker says buyer intends to erect buildin fOr U. S. Inunigration Services. (Excludes . price- paid for any. te�an leases. Sale was a delayed closing. Mortgage Term - Principal $ 60,000.00 due 7/21/79 $190,000.00 due 7/21/80 Balance $190,000.00 due 7/21/81 Buyer deeded to City, of Miami 1/31/79 OR 10384, P ' 297 W 5 ft. of Lot 11 and South .5 f t . of Lots 11 and 12, which is 1,100 Sq. ° Ft. Leaves net ground floor area of 11,400 Sq. Ft. City of Miami granted to property owner 5/4/79 OR 10384 P 297 perpetual exclusive easement, ail'; rights over these 5 ft. strips beginning at 15 ft. height above ground elevation. LEONARD A. F3ISZ, M.A.I., REAL ESTATE APPRAISER 8 CONSULTANT 11111111111.111.1.117 SALE REC) SUBDIVISION SEC. DATE 7/28/77 RGE. GRANTOR "Miami ("tribeInvestments, IncADDRESS Argon Florida Corp. ADDRESS 600 NE 36 St. Apt. 1223 Miami, Florida LEGAL: Parcel I Lots 17 & 18 8i W 50 ft. of Lot 1, and S 50 ft. of Lot 4; also allcyway:10 ft. in Width on Lots 1, 19 & 20, described as south 3 f t . of Lot 1 less W `'50 ft. thereof' & N 7 f t . of Lots 19 and 20; also alley 7 ft. in width, over Lot 4 described as E 7 ft. of Lot 4 less S 50 f t . thereof. Known as the Paramount Bldg. Parcel II - W 43 ft. of N 100 ft of Lot 4, known as the Bradford hotel Parcel I.II - E 100 ft. of Lot 1 and A/K/A portion of Calumet Bldg. B1k:118 N, City Miami B/41 SIZE & AREA: 29,700 F. Ft. x STAMPS:' State; s 9'900.00 Surtax 630.00 CONSIDERATION: IMPROVEMENTS: 7.ONING: LAND UNIT PRICE: er F. Ft. LESS IMPROVEMENTS $ LAND ONLY: 3,300,00C 450,00( 2, 850,00( 111.11 Per Sq. Ft. $ Per. Acre Land and -Building over-all Price 100 FF. 251-263 E.Fla_gler-St. 50 FF 250 N. E. 1st St.' 57 FF 26 N. V. 3rd. Ave. Total building area 44,581 adjusted Sq. Ft. 1977 sale indicatedabout$96.00 per ;Sq. ;Ft. average Sq. Ft. land price per Adjustment to,Current Market would after deduction for main building, indicate about $100.00 to $110.00 per Sq. Ft. LEONARD A. BISZ. M.A.I.. REAL ESTATE APPRAISER & CONSULTANT ,,,,,,,, cr.'Q ZO3roxd Joseph R. Grassie City Manager >>j,L•, Ino, : im Coon V Project Director CITY OF MIAMI. FLORIDA INTEROFFICE MEMORANDUM suuJcc1: Basic Terms World Trade' Center Plan in negotiations with the private developer group consisting of Miami Center Associates, Inc., Worsham Brothers Co., Inc., Turner Development Corporation, Sefrius Corporation, Miami World Trade Center, Inc. and. Dade Federal Savings and Loan Association, a proposal has been developed with the private developers subject to City Commission approval as follows: 1. The City will apply to the U. S. Department of.Housing and Urban Develop - cent for a $7,473,400 Urban Development Action Grant to the City of Miami,, the proceeds of which are projected to be applied in accordance with the attachment entitled Summary of Proposed Expenditures, page 40, of the proposed grant appli- cation.' 2. Provided the grant is obtained, the private developer group agrees to invest private funds in th• approximate amount of $37,500,000 to build a World Trade Center building consisting of approximately 450,000 sq. ft. of net rentable arca, of which Ddc Federal Savings and Loan will occupy 150,000 sq. ft. and the Miami World Trade Center will occupy 300,000 sq. ft. This building, to be built on air rights over the City of Miami Conven- tion Center parking garage, will pay full real estate taxes. 3. The private developer group is prepared to pay the City of Miami an air rights rental of $300,000 per year with.appropriate escalation in accordance with cost of living increases (Consumer Price. Index) and actual rental increases obtained by the World Trade Center portion of the building. The initial lease ;term ..will be for 30 years with two renewal terms. of 30 years each with provisions similar to the provision of refurbishing and updating of the air rights structure as con- tained in the lease and agreement with Miami Center Associates. The rental payments are proposed as follows: $150,000 per year beginning upon beneficial occupancy tower escalated annually by the change in the CPI. $150,000 per year deriving from phased in as follows: World Trade Center leasing activities (1) S50,00CY per annuni upon achievement of 50% occupancy. ,(2) $1.00,000 per'annum upon achievement of 75% occupancy. (3) $150,000'per,`annum:upon achievement of-90' occupancy. (4) The $150,000 shall be payable in any event' after 5 years from beneficial occupancy.' (5) The $150,000 per annum will escalate based upon the actual percentage increase achieved on an annual basis after the World • Trade Center portion of the building has reached 90% occupancy.. 4. The City's parking garage consultant, Conrad Associates, Inc. originally recommended 750 parking spaces for the Convention Center and hotel. It is now proposed, with the addition of the air rights, that an additional 450 spaces be provided in this garage,thus making the garage 1200 spaces total. It is anticipated that of the 57 473,400 UDAG grant, $2,710,000 will be allocated to these additional .450 parking spaces. The City will charge "market rates" for these 450 spaces and derive the in- come .therefrom, ;which income is estimated to be $484,000 in the 5th year of operation. Such income averages over the first 5 years $368,00 per year. As stated above, there is no debt service on these funds and thus are available to the City. 5. The City does not subordinate its land or any of its investment to the air rights structure. 6. In the event that the private developer group (Miami World Trade Center,Inc.) determines that they no longer choose to operate as a World Trade Center, the City would have right of first refusal to succeed to the lease and the franchise for the World Trade Center in order that the City may be assured of a continued public purpose in this development. 7. One floor of approximately 15,000 sq. ft. will be set aside for City of Miami functions. The City will pay direct costs of construction and operating and maintenance costs only during the lease term. SUMMARY It is projected that the City will receive full real estate taxes on a •$37,500,000 private investment; over $400,000 per` year in net income from parking; and over$300,000 per annum from the rent ofair rights. • • '' cr F� 7:►n 1!, t'.F.:N �:::.rr'•:�;L • •• • • %A:: Yr • • • L.i=� Ari i•)cAr1Gli }i:•: • (o) 1 -d.ad arc•Jis.tlon; MAG (b)': 75.9, 000 411,000 (f) 1,871,000 2., IStreats a :site rr• r..v. eats 3. win= facilities I 50.`Ob0 f Vettr.d•ticas a •plat=..-s • S.'Pedestrian calls 2,710,00-0 6. rat a '. -'le_raace & .derolition i. .hey.•••, • La t! Qn • 142nnn 2e,000 35,0001 50,000 "100,000 ,507,650 17,217,650 11,728,000 ,026,000 I1,368L000 5,000 25,000 119, 9.07 I 154907 dvs`r! el' — Pes+.0e i.1'• ▪ . 10. IRe3c atlen • '.• 1l. Iot*er (i..st) .::.: •talestrtel e. 1.000.000(37.500'0 8500,000 Peslde-"a 50,000 50,000 a. Roof Garden 5! ,•, Downtown People Mover •• i c. • SLutiun •,. 12. k.-- tnistrative costs .. • . 13. S...total (Sum cf. lines.1 ' . .'r_eti 12) • 14. ICcntirae:uies (::at to exceed ,O: of line 13) • • • : • 15.1 Pr'ocr a.:. income 16. • • •• • • • • • • • • • 250.000 200,000 250, 002_ 100.000,.:;.,,_ `.._ •rc.:'T' _.�4.�... 6,794,000 37,500,00�), I7",520,557 ' - Ir +�C?Y'!r � •tom a..I si � • .� ....� 7,473,400 '::r• .. . • y- 37,500,0017,520,557152,493,957 250,000 200,000 250 000 100,000 , 814,557 679,400 ace 40` • • (p/.7 SEFRIUS CORP. MIAMI WORLD TRADE CENTER Mr. Joseph R. Grassie City. Manager City of Miami 3500 Pan American Drive Miami, Florida 33133 Re: World .Trade Center Dear Mr. Grassie: INC. TURNER DEVELOPMENT CORP. Joint and Co -Developers May 29 1979 On behalf of the above consortium acting as Joint Developers we herebycommit to develop a World Trade Center inaccordance with the attached plan being pre- sented to City Commission. Our commitment is subject to the foliowing terms and conditions: 1. That the City approve the plan and enter into a Lease Agreement with Dade Federal Savings & Loan Association who in turn enters into a Sub -Lease Agreement for approximately 300,000 net rentable sq. ft. of space to the above consortium upon terms and conditions outlined in the plan attached herewith, and in such final legal form acceptable to our counsel. . That the City build 1200 parking spaces in accordance with the plan (we understand that approximately 800 of these spaces are committed to the Hotel and Convention Center). 3. That the City obtain adequate and sufficient funds with which to. build their portion of the project from the Department of Housing and Urban Development and through the issuance of their bonds, or from other sources. We believe this project, after careful analysis, to be.economically .feasible from all parties standpoint, and are prepared to proceed immediately upon the execu- tion of the appropriate documents. We look forward to participating with the to downtown Miami . ESW/mc 1401 "All .%tdb e4 Aatt ./1(71./...✓,uile C7 9 this very important: addition Earl S. Worsham t l; .� I::i• M�I'If�yIN'i.• '►t �41I Ilwrt ,,1i it,+fl ;1J, Mitt:, )f r.1Y''i.. :41tS4.: j t0f,44 i 1, 11-1;R� �1 " ``ulFt; It`_II i z i i; II , ITTT,O ;!'.i �l �---.." " 11.°..!!,f' It y� .._.' ade 2 ecleral :_ . avngs AND IOAN,-ASSOC•IATI.ON Of MIA'M.I MAIN O1110E ..• -101 EAS11lAO&El1''S1EEE1 MiAMl ILOIIIDA 33121 1d.phune ,•• D.J..0 321 2000 • Lr.w..d Ceunly 3.17,2041, • Mr. Joseph R. Grassie City Manager City Hall City of Miami Miami, Florida Re: Miami World Trade Center The following is our commitment for the development (financing) of the World Trade Center upon the terms and conditions outlined below: Pursuant to the conceptual approval of our Board of Directors, Dade Federal will purchase a completed building consisting of approximately 450,000 sq. ft. and certain areas within the City of Miami Parking Garage to be located at the intersection of S.E. Second Street and S.E. First Avenue. The purchase price for the said proposed building will be approximately $37.5 Million, depending upon its final cost. Attached herewith is an outline of a plan to be submitted to City Commission for its approval, which plan will be the principal subject matter of a Lease Agreement to be entered into between Dade Federal Savings & Loan Association, Miami World Trade Center, Inc., and the Developer (Sefrius/Worsham Brothers/Turner Development Corp.). The terms and conditions of this .Lease in its final form are subject to our Board of Directors' and our attorneys' approval and must be in conformity with all rules and regulations applicable to Dade Federal Savings dr. Loan Association. Our commitment is further subject to the City providing a 1200 car parking garage as part of the ,overall structure, which parking garage we understand will be owned by the City. • 0 DADE FEDERAL SAVINGS AND LOAN ASSOCIATION OF MIAMI, MIAMI, FLORIDA Our .commitment is further subject to the City obtaining the necessary funds (approximately 17 million dollars) to be comprised of the proceeds from both the issuance and sale of the City's proposed bond issue and the receipt by the City of .a grant from the U.S. Department of Housing and Urban Development pursuant to an Urban Development Action Grant that we understand the City is pursuing. We look forward to working with the City, the Developer, and as required the U.S. Department of Housing and Urban. Development and the successful implementation of this important $54 Million program from the City of Miami. r'.irJ4/r. - - - - - - -e4.1.--'.ie�er' 15:.�' - - -L'n:d- - — - 'idwr..-iia32-•wsa:. ::.::.:.um :::'r'.►... • .. • •• t! i tj 1; i • e1 ie Fi Rental Rates 1979-1980 • • •..yt. C.iralda Avenue (Corner of 1`uiice de Leon Blvd.) `.Grwnul has been broken j'r the MOO square foot Ponce and Giraldet Building located at one of the Coed (fables' prime irclerseel,.ms, according to Will Wilkins, Clark- lliu►uli s vice president .for construc- tion. Designed 1►y Kenneth ,Hiller. A1,t, the structure twill fe snare five street level stores. 77ie second floor mr::anine is suit- able for offices or may he combined to ex- pand the ground floor. A 2,S0Osquare foot office penthouse, is also featured. Tl:e Clark -Biondi Company is acting as the general contractor. as well as managing and !casing agent. For rental information call 374-2111. t tc t i ewes unhrrok _ JsiscamIUa1L esee i Looking Ahead: charges per month will be $15•$40 per space. Typical lease escalation clauses call for rate adjustments to meet real estate tax and util- • itics increases as well as changes in the consumer price index. New buildings located in suburban business centers or office parks will rent at S9 to SI I per sq. ft.with full scrviccs. In most cases, parking will he included and common area proratiuns will he absent: Escalation provisions generally will be based on a pro-rata share of operating expense increases with the CPI applicable to renewals and leases that extend beyond five years. What Does It Cost To Operate An Office Building? • An SI1 to S14 per sq. ft. rental rate is predicted for typical office space in multi- story, full -service office buildings in the Brickell Avenue, downtown Miami and Coral Gables areas. Parking will probably run S40 to S60 extra per space monthly. Rates now being quoted for a 300,000 sq. ft. building under construction in the Bricked area range from S10.50 to S12.50 per sq. ft. Another SI to SI.50 per sq. ft. will be added as tenants pay their pro rata share for common areas on their respective floors. Height abet vicwaccount fortbe variance in rates. Parking Well, it all depends. First, how space -efficient is your building? Operating cost is related to a building's rentable, rather than gross space. By effi- ciency, we mean the ratio between rentable send gross arca. Ninety per cent rentable arca is excellent, 70 per cent is poor and 80-85 per cent is the norm. A developer budding to produce income strives for maximum rent- able area while a corporation, building for its own use and more concerned with image, might design a building with impressive land- scaping, a spacious lobby and a Tess efficient, but more aesthetic floor plan. The operating costs between two such building types will vary dramatically. Other factors which affect operating costs arc quality or construction, tenant -to -land- lord scrviccs, building size (unit operating costs generally being less in larger office buildings), and location (affecting real estate taxes, insurance: rates and utility expense). We have compiled an operating cost index applicable to bill -service office buildings in South Florida to which you may wish to compare your owls building: Utilities insurance -Liability Cleaning Conuact Elevator Contract Building General ke.l Eautc Taxes Trash Itcmuval kepairs do Maialenance Management • Low .1I21 .022 .300 .038 .054 .447 .027 .1311 .flit High I.41(, .162 .601) .160 .664 1.18 .047 .622 .541 Avg 1.116 .00 .48 .11 .232 1.O1) .027 .2114 .21i5 3.568 • By relating each item of a building's expense to its rentable area, you may be able . to spot areas where money is going to waste. .enabling you to take corrective action toward a more profitable venture. Townscape 1 Construction is underway on a unique trio of lu.uoy cunduntiniUnis in the heart of Coconut Grove built for privacy u.► well as architectural appeal. Nish sun• leeks. Jacuzzi and privacy glues. the rc'.•idenres will blend modern luxury with rich woods and abundant landscaping indigenous lei the Grove. Project joint eo.develapers. the Clark • Biondi Company, is the general con- tractor and .sales agent. i • • 1. :.lees— . _• , -4:. i• :•. •. ,.,,.•�. :.. {:; :.. • . • , ..•. . :•. ,.11•, .:. . 1 1.. ftu1tt" •• From Nerst4 Stall and wire Rererta 1 . , .• •• y Office rents have soared 29 per cent in Dade `S '• . County since 1977 and available space is becom- >• Inc harder to find. according to two surveys. • .• •• With growir.g demand and a tighter supply. •' ;t `� , .„'•- •office space in new Greater Miami buildings is •' . -r_:.• renting for an average of $10 a square foot this • • :• ••�;.:. • • year, according to The Howard Ecker Co. of Chi- " `• •- •: cago, which conducted a survey of 17 U.S. cities. Although that's a 25 per cent jump above the city's $8-a•square•foot average of 1977, it's still` below the_ current average for 17 major cities of .: $11.76.;•• r c•- i 1N ADDITION. the firm found that rents in older Dade offices jumped from $6a square foot •. in 1977 to $8 this year. , . : • According to the Ecker survey. rents nation- wide have soared 51.6 per cent in older -buildings :- - and 39.3 per cent in newer buidlings, mainly be- , • cause there isn't enough space. "Despite the increases, the demand is still there and the outlook for new construction is :t-,':• good." said Ron Bokor. a vice president of the • Chicago firm. "Insurance companies.'for exam-.• i pie. are flush, and they're looking for things to put money into." Even a recession wouldn't ease the situation. said Carolyn R. Johnson. a spokeswoman for the:. :'Office occupancy is IA ii: Ia-.! :-lt. :r:r t fi�•1 •., . im in • • s., 1 • • 'off somewhat'' as new buildings are completed., . -ref.' So does Frank Pigna, an.administrativc assistant i • ::a.r with the .Allen Morris" Company.' one. of 'the- `:' _ : • •?.-%'area'slirgest specialists in leasing space. . : ? ; ��%: •• . While rental space is. -"very tight" in key 1 • areas of the county. Pigna said, he expects it to i ease within 18 months, "when several new, pro- jects will help alleviate the demand." - • ' ' •! Even wiza its increasing rates' and 'low.ba- f • •• cancy, Miami is not facing the huge rate hikes,,. r, and critical shortages experienced by renters in' • Rent rates for office space over the Iast two; • years rose 56.5 per cent in New York, 63-per • cent in Chicago and 38;5 per cent in Los Ange11's, • according to the Ecker national survey.. . :•i tr- • Kansas, Atlanta and St.. Louis have the lov<- 'est rental rates for newer buildings of the 17 cit-`.• ies surveyed, while Phoenix. Washington and Detroit have the highest rental rates increases. • THE SURVEY found only one city where rents have decreased since 1977. Rents declined' 2.5 per cent in Anchorage, where completion of ` the Alaska oil pipeline has led to a downturn in + economic activity. ` r ' Other cities where rents increased.. and the ; I) • . amount, were: Phoenix — 88 per cent; Washing- ilcw; ', � � - 1 + ''ton — 82.5 per cent; Detroit — 75 per cent:' Chi-1 1 �>f _i. , cago 63 per cent; New York — 56.5 per cent; At- , ? ; � ui ` ; Tanta •— 56.5 per cent• Boston — 55.5 per cent; consulting firm.. i•. , f the — 35.5 per so high that even if L-,1 ;W —cent- there were to be a recession, the situation shoo.. _ = y .. •_, p>." 38.5 per cent; Kansas City — 37.5 per cent, . several major cities. • "--�� t�}_i� = -- • =- ' • San Francisco — 42 per cent; Sea 1 `�� ` - : r' `" t• Houston — 38.5 per cent; Los Angeles'=- the same unless businesses dropped out ,,r:.- ..• 38. — 29 5 per cent, St. Louis 27 per -, rate she said -..• Honolulu er 8 5 per cent. IF PRESENT trends continuo, in mid-1981 . ' •, � ' - .. '` Houston, Chicago, San Fra:isisco and St. Loui"s. businesses will pay twice the rent for office Dade Rates Rise 29% i ;•".:',Houston, than they paid in mid-1977. the firm re- `- occupancy hits 96 97 Der cent `.:,, where occupancy rates now reach 97 or 98_ per P cent according to the survey. • ported. •' ` •' , , ... "A great deal of new office construction has The national survey.' coupled with a recent: � j � - � �� : g78 this new sampling by The Clark -Biondi Co., a Miami coin-' ell Avenue, Coral Gables and West Miami — mercial real estate firm. shows that the area's'. which include about 70 per cent of the commer-' office occupancy rate of 96 to 97 per cent has ex- vial space in Dade.. . _ eeeded the nations average that Den-, remain :. .. of the market at an incredible : ' .. • .-,,....• ;, • and ono •` '• Severe shortages of office space have; hit • ► of 93 per cent CLARK SAYS he inventory of available' "What this means is that we ve •got areal. ,..,..• •shortage of desirable space. and not that many • space has dropped from .about 900,000 square new buildings have gone up since last June,"•feet to occupancy,000q rare feet since eshave hit last per r. As said Peter Clark. president of the company. His survey, which compared rates and avail Coral Gables and 97 per cent in the other three' ability from June, 1978 to March of this year, fo- areas surveyed. cused on four areas — downtown Miami. Brick- • Clark believes that rent increases will level the occurred or started over the last two years.' the survey said. "For a brief period in 1 i competition to existing .buildings held prices somewhat in check, but the expansion needs -of' business have far outstripped the amount of,ncw I. office space generated.' The survey said that 16 million of the 34 mil-' lion•square feet of office buildings on the draw- ing boards for future construction are earmarked for Chicago and Houston.:• _ rn, n a[►trc 1 • r 5' 0 N • • etSa. MittPC At. ESTAIL .. 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Z.:t•*r :%•.- ' •77.°.01.tc? •••. •;••• C;.+11; 3.•-eZ • .•%••••14.7:' . • 0' 7.; • .• ..k.0 t:7'!';7,,s'. ce • • • • ti=errAt :: 4 �xlrTwfv`k•'tr I ~.r Ore," l'�l^.! •y,.• •:�.!.: • • •7!jlj��,U4,��,'�{' 'w �—lam•'.•:iIt! :.��.�t•!s'i''.t•..•va-; i. »' �+:r•• .jr t .arY•• ,; ,.:i• •••i. •' ••r• • � I ••fi .• {'{�•. !� • • • SECTION 14(' E 14 March 1978 CLASS TYPE Average service Average stor:''e A Good r irking Average parking Low cost narking Average service Average storage Good parking Average parking Low cost narking Parking basement Parking underground Good showroom Average showroom Low cost showroom Average storage C Excellent service Good service Average service Low cost service Parking basement tRESIDENTIAL GARAGES MULTISTORY BUILDINGS to all base costs. SPRINKLERS - Add from A-B • COMMERCIAL GARAGESt (CALCULATOR METHOD) EXTERIOR WALLS Brick, reinforced concrete, ood fenestration Brick, reinforced concrete, little ornamentation Partial wails. brick or concrete, ornamentation Partial walls, brick, block, concrete. little trim Demountable type, without fireproofing Brick, reinforced concrete, good fenestration Brick, reinforced concrete, little ornamentation Partial walls, brick or concrete, ornamentation Partial wails, brick block, concrete, •lain finish Low parapets, precast frame and floors. minimum finish Unfinished concrete, waterproofed walls Unfinished concrete, waterproofed Unfinished, some office and walls and load -bearing roof service areas Brick, concrete, good store front, good ornamentation Brick, block, concrete, good store front, some ornamentation Brick, block, tilt -up, simple store front, low cost entrance Mill type frame, brick, plain facade Steel or concrete frame, brick concrete panels masonry curtain or bearin walls walls, some • artitions Masonry- walls, bond beams and pilasters, light trusses Light masonry bearing walls, light rafters Unfinished concrete, waterproofed - See Section 12. - Add .5% for each story over three, above ground, INTERIOR FINISH Some plaster and glazed surfaces. ff' masonr artitions LIGHTING. MECHAN CALL *Good level of lighting, offices. ade • uate •lumbin Plaster or drywall, masonry partitions, *Low lighting levels, minimum small office and service area .lumbin Unfinished, except good office and service area Unfinished, small office and service area Unfinished, some masonry shear walls. minimum extras Some plaster and glazed surfaces, offices mason •artitions *Reading level lighting, rest - rooms and service •lumbin *Low lighting level. drains. minimum restroom for office *Low lighting level, drains, minimum •ersonal .lumbin *Good level of lighting, o Ices ..r ade•uate •lumbin Plaster or drywall, masonry partitions, *Low lighting level, minimum small office and service area .lumbin Unfinished, except good office and service area Unfinished, small office and service area Unfinished Unfinished Plaster, acoustic tile, terrazzo display floor, good office area Plaster, or drywall, acoustic tile, vinyl asbestos, office. sales cabbies Painted walls, few drywall partitions, asphalt tile Painted walls, mill type floors, mason partitions Much plaster, tile trim, or painted walls, good office Steel concrete or glulam frame, Finished office, painted Section 44. Unfinished, small finished office area, concrete floor Unfinished, small partitioned office area, concrete floor Plaster or drywall ceiling, concrete floor *Reading level lighting, rest - rooms and service .lumbin *Low lighting level, drains, minimum restroom for office *Minimum lighting and lumbin Minimum lighting, drains Good lighting, restrooms and service •lumbin Good display and office lighting. restrooms Store and office lighting, small restrooms Adequate lighting, minimum plumbing *Minimum electrical and .lumbing Good electrical, lighting and service outlets, : ood restrooms Adequate lighting and service outlets small restrooms Adequate lighting and service outlets, small restrooms Minimum electrical and • lumbing Minimum lighting, drains HEAT Hot water Steam None None None Hot water Steam 14 None 1.23 17.21 .94 13.09 None None Ventilation Central A.C. 1.74 simnle ducts Package A.C. 2.46 Package A.C. 1.90 Forced air 1.39 (central slant) Stearn 1.22 1.66 Forced air 1.34 central .lant Space heaters .96 Space heater - .73 Ventilation .68 Package A.C. COST Cu. Ft. Sq. Ft. $1.66 $23.22 1.47 2' 58 1.29 18.06 .99 13.87 .76 . 10.65 1.60 22.34 .71 ', 9.94 1.07 14.93 24.38 34.47 26.60 19.48 17.13 26.01 18.70 13.50 10.18 9.53 arked with `ELEVATORS - If none aregs with foundededuct the following from the base levators included in the base costs are s an asterisk (*).t per square foot for' buildings on this page which are so marked. Good . . . . $ .65 Average . $ .50 Low cost . . BASEMENT ELEVATORS - Add cost of basement stop from Section 58. $ .35 • SECTION 15 PAGE 15 July 1978 CLASS: • LIGHTING, PLUMBING HEAT TYPE EXTERIOR WALLS INTERIOR FINISH AND MECHANICAL Best metal or stone, brick or Plaster, best veneers, vinyl wall *Luminous ceilings, many out- Hot and chilled 96.15 $73.81 Excellent lets, many private restrooms water (zoned) office block back-up, solar glass eovenngs; �invl; terrazzo carpet metal and solar glass, face Drywall and plaster, some wall cover, *Good fluorescent, high intensity Hot and chilled 4.83 58.01 Good Good rlighting, good restrooms v:ater (zoned) off ce brick. precast concrete panels acoustic tile, vinyl tile, carpet *average intensity fluorescent wa er and cool : 3.67 44.00 Average Brick, concrete or metal and Average partitions, acoustic tile, lighting, average restrooms air (zoned) 2.90 34.83 office glass panels; little trim vinyl asbestos, some exizas, Warm and cool Junirnu:n cost walls and Drywall, acoustic ceilings, *Minimum office lighting air (zoned) office e asphalt tile. few .artitions and .lumbing6.61 79.26 Excel fenestration, .sale trim good veneers, vinyl wall *Luminous ceilings, power and Hot and chilledf� Excellent orBestb metal back-up, usolar brick Plaster, X-ray outlets, best plumbing water (zoned) block glass ` coverings, carpet, vinyl } y Hot and chilled 5.30 63.62 j medicalGood taster or drywall, acoustic *High intensit • lighting, X ra • Good" Good metal a:e and glass glass, face P g water (zoned) brick, concrete tile, carpeting, vinyl asbestos outlets, good plumbing 4.13 49.50 medicalPlaster or drywall, acoustic tile, *Adequate lighting, power. and Warm and cool Average Metal and glass, brick or plumbing, X-ray rooms air (zoned) panels vinyl asbestos floors medical concrete acoustic tile, asphalt tile plumbing, few extras Package system 3.20 38.44 Low cost finishes and partitions, *Minimum lighting and . *Luminous ceilings, many out- Hot and chilled 5.77 69.21 coverinr gs, vinyl tile, terrazzo lets, many private best veneers, vinylwall restrooms water (zoned) Hot . 4.56 54.73 Drywall and plaster, some wall cover, *Good fluorescent, high intensity Hot andr chillede acoustic tile, vinyl tile, carpet lighting, good restrooms Average partitions, acoustic tile, *Average intensity fluorescent Warm and cool 3.47 41.69 vinyl asbestos, some extras lighting, average restrooms air (zo ed) *Minimum office lighting Warm and cool 2.77 33.21 Drywall, acoustic ceilings, and plumbing air (zoned) asphalt tile, few partitions Plaster, good veneers, vinyl wall *Luminous ceilings power and Hot and chilled 6.31 75.73 u OFFICE AND MEDICAL OFFICE BUILDINGS (CALCULATOR METHOD) Brick, concrete block. very plain, small Lobby Excellent Best metal or stone, brick or office block back-up, tinted glass Good Good metal and solar glass, face office brick, precast concrete panels Average Brick, concrete or metal and offitel glass panels, little trim Low cost - Minimum cost walls and office fenestration, little trim ExcellentBest metal, insulated, brick medical or block back-up, solar glass Good metal and glass, good brick, concrete panels Metal and glass, brick or concrete panels Brick, concrete block, lift slab. very plain. small lobb Plaster interior Low cost medical Good medical Average medical Low cost medical_ Basement offices Basement Basement 1:ezzanine office Mezzanine Not included open Storage..ainted interior Parking, unfinished Not included coverings, carpet, vinyl Good plaster or drywall, acoustic tile, carpeting and vinyl asbestos Drywall or plaster. acoustic tile, vinyl asbestos floors Low cost finishes and partitions, acoustic tile, asphalt tile Average office finish, acoustic tile, vinyl asbestos Partitions for storage and heatin Unfinished small service area Enclosed, average office finish, .taster soffit Carpet and vinyl asbestos, plaster soffit MULTISTORY BUILDINGS Add .5% for each story over three, above ground, to all base costs, excluding mezzanines. SPRINKLERS X-ray outlets, best plumbing water (zoned) *High intensity lighting, X-ray Hot and chilled 5.OS 60.93 outlets, good plumbing water (zoned) *Adequate lighting, power, and Warm and cool 3.96 4 7.5:1 plumbing, X-ray rooms air (zoned) *Minimum lighting and Package system 3.08 36.93 plumbin , few extras Adequate office lighting Warm and cool 2.76 33.0S and plumbing air (zoned) Minimum liahtin,, and .lumbin: pace heaters 1.33 15.90 Minimum li • hAin,' and •lumbin Ventilation 1.37 ------- 16.46 Average office lighting In building cost and .lumbin* 13.07 Average lighting In building cost ------- and plumbing *ELEVATORS - Buildings with elevators included in the base costs are marked for CI Cu. Ft. T Sq. Ft. build- ings an asterisk (*). If none are found, deduct the following from the base costs on this page. Excellent . . . . $3.55 Good $? 45 Average . . . $1.70 Low cost . . . $1.15 Basements and mezzanines: add the costs of additional stops from Section 5S. Add for sprinklers from Section 45. MA;SM Ars ' L VALUATION • SERVICE ...At L Arta ntYIFT FUOLICATION CO. -PRINTED IN V.S.A. • I III-IIII� 7/7S F` rl Orr' . .••..,. •I., rr••rr '� F1 t • •••ter••.: j.� 1�•1 r 5 1 •3•► 1•1•1•1..T.I.1 _1 1.1,1•1.1.! MID e (TT .1 .. r. ?-lallos8104 rld3•a I.i1:.1 •I.1• • - .i J PROPERTY OF MIANI STEAM ELECTRIC STATION FLORIDA POWER AND 11611T CO A 6 isillegill mi HIM r.110 5"""0 S is NW. • 4 ST. DADE COUNT./ coURT MOUSE STREET • • • 1 • • • If • Ot 111. 1914, 51.. 4 • 11 •I • w :I• I' I» 1 u 5 T. • • .ew 4 T.T:LI.i•T•} •Mm•wrV 9 • • • do • der{. .1 •1 .1 .• PC ..jl• N.� A• • POST ACI) OFFICE u rl • .1 • 2 • • •.IIt • 11111111 N.E.— H 1r z • I• •• • ie hE ..L / •• • • , • 12. M 1 1 1 ;• • I •r.•r•• 101 S.♦ ST LEONARD A. DISE. M.A /.. REAL. ESTATE APPRAISER AND CONSULTANT 3 .• I. • » • . • FLAGL£F • • N i 11 • t. r • I• NE • .r �x3y 41 • 69 • ' • 90 n • n6 w I• r ra .1 EAST , TRACT • • •I• 61 ,z3 SE. • .• • I e NAL • At IC is po: TRAC 4 181 7.7771.. . • • a • • •• 4:file a • • ;" • / ( Al AO . ''..4..... goo . Ol•• -••• , °•• ar....remar5A2=O. . ...7 - -L.--.111.," ,- . •••E .... LC1 1 . • . .r .., I 1p I ti 1- I-1' ' ..1±1. '-'14i.j4.P•14‘0114111,1), 1j ...6.'OtapcS1 id ; 7 ' 'ii ., I • 1•1 %I I.* .4•60 f. 0 11. )4 '1 .. "tam Oh, vtiotcuLas csusevoin /11 r0O1 Or MOM TURNIPKI ea 311/ . .... ....WesalimmilUels.....na. h .........1 7 ...... b....3 T................ I 4 444 5 assassoss • • • T ...T:iagan• • . J.. • I ?r° I•••••• • Is • ••• nerd of r • I- I S4SULTANT CITY OF MIAMI ZONING MAP 267 ONTI N G .0 OLE • CITY OF MIAMI CLASSES AND SYMBOLS FOR THE PURPOSES OF THIS ORDINANCE IN REGULATING USE OF LAND, WATER AND BUILDINGS, .AND HEIGHT. BULK, POPULATION DENSITY AND OPEN SPACE THE CITY OF MIAMI IS HEREBY DIVIDED INTO THESE DISTRICTS. SYM90L RESIDENTIAL DISTRICTS R-1 One -Family Dwelling -R-IA One -Family Dwelling R-IB One -Family Dwelling 12 Two-ramfly Dwelling R.3 Low Density Multiple Dwelling R-3A. Low Density Apartment (ord. 7824) . R-y Medium Density• Multiple Dwelling R-PO Low Density Planned Development (Ord. 7150)' R-5 High Density Multiple Dwelling R-SA High Density Multiple Dwelling (Ord.•7150) R-C Residential -Office it -CA Residential -Office (Ord. 7133) R_'Cs Residential -Office (Ord. 7982) R-CC Resldenttal-Office (Ord. 8592) R-C-I Resldenttal-Office-Commercial (Ord. 7983); C-1: C-1A C-2 C-2A C-3 C-4 C-4A C-5 COMMERCIAL DISTRICTS Local Commercial Planned Shopping' Center District''r Community Commercial Special Community Commercial Central Commercial General Commercial Boulevard Commercial Liberal Commercial WATERFRONT Waterfront -Recreational Public Park and Recreation Vaterfront-Industrial INDUSTRIAL Light Industrial General Industrial SPECIAL DISTRICTS Planned Area Development (Ord. 8057) Governmental Use District (Ord. 8283) Central.Lsland District (Ord. 8330) Coconut Grove Overlay District iOrd. 8627) (Ord. 8382) based upon commitments presented to. the CommiSiOfl on June 4,, 1979,`'subject to final negotiation; and approval by the City 1/0101 THE MOSS / FLEMING COMPANY REAL PROPERTY SPECIALISTS 150 E. Palmetto Pak Road Boca Raton, Florida 33432 telephone: (305) 391.8144 December 1978 TO ALL BUILDING OWNERS -AND MANAGERS OF THE GREATER MIAMI AREA Thank you again for supplying the information that makes possible this latest edition of our Greater Miami Office Space Survey. There have been some significant changes in the last year which are continuing and which will affect your own individual operations. I will summarize these for the sake of easy reading. Perhaps most significant is the fact that the 1978 office space occupancy of the 173 buildings with a total gross area of 11,536,356 square feet shows an increase of 5.5% o for a total occupancy of 92.8% as compared to 87.3% a year ago. Those areas with high occupancy of over 90% are as follows Miami, Downtown 93.6% Brickell Avenue 97.2% Coral Gables 94.3% Coral Way 94.2% North Miami Beach 97.2% Miami Beach 97.1% Dadeland and North Kendall:, 95.4a Palmetto Expressway 94.2% The only areas that are lagging are the following Biscayne Blvd. 82,8 Southwest 1st Street 87.3% North Miami 85.8% Miscellaneous 86.60 Most significant is the fact that 598,526 square feet of space formerly vacant was occupied during the year leaving only 834,948 square feet to be leased. It is quite obvious that Miami is coming up with an office space shortage, which fact has already been recognized by office building devel- opers who have the following buildings either under con- struction or ready to start: Dadeland Towers North Flagship Bank Building Intaterra Total 140,000 sq.£t. 280,000 sq.ft. 125,000 sq.ft 545,000 sq.ft. It has been our contention for a number of years that the Greater Miami Area can absorb 500,000 square feet of new ,. office space per year and at this time the area seems to be in approximate balance with the following totals: Vacant space Leased during the year Under construction 834,948 sq.ft. 598,526 sq.ft'. 54 54 000 sq. ft:. Health in any rental market is most often taken at the 5% vacancy level which means that the Greater Miami Area can carry 576,800 square feetof vacant space as a healthy figure. Along with increased occupancy, rental rates have been in- creasing from a low of 25$ per square foot on Miami Beach to $1.37 per square foot on Brickell Avenue with the average running roughly at 60$ per square foot. Top rents have in- creased dramatically which is an important encouragement for further new construction. Listed below are the changes in certain key areas: Area Miami Downtown Brickell Avenue Coral Gables Dadeland/N. Kendall Palmetto Expressway 1977 $12.15/sq.ft. 11.00/sq.ft. 11.25/sq.ft. 9.40/sq.ft. 9.00/ sq. ft. 1978 $1 0/sq.ft. 14.50/sq.ft. 11.25/sq.ft. 12.00/sq.ft.. 12.00/sq.ft. Many new buildings currently contemplated are on the drawin boards and are predicating their success on average rents for an entire building of between $12.00 and $14.00 per square foot. This is the loth year of our office space surveys and it is interesting to note the changes over the years. Percent oc- cupied in Downtown Miami showsthe following changes: 1969. 1970. 1971 1972 1973 1974 1975., 1976 1977 1978 THE MOSS / F'LEMING COMPANY 91.3% 96.6% 97.7% 98.3% 78.6% 79.4% 78.0% 75.5% 84.4% 92.8% . It is our prediction that there will be another two to three "good years" before oversupply will again drop the occupancy levels. It continues to be a disappointment to us that two or three developers try to satisfy the need for office space in the same area at the same time which can quickly turn a shortage into a glut. It can only be hoped that the lending be more ore ions niindfullch make of Miami�'sssible officeshe spacefice supplylandngs dl demand be figures. We have been called in the past for figures on individual buildings which we have promised to each of you we will not give. We treat the information that you have supplied con- fidentially although we will give out additional general information if you have need of it. Our Miami telephone number is 445-9641. THE MOSS / FLEMING COMPANY BOCA RATON. FLORIDA 33432 GREATER~ MIAMI--OFFICE SPACE• SURVEY October/November 1978 Area Miami Downtown Biscayne Brickcll Coral Blvd. Avenue Coral Way lst North Miami North Miami Miami South. Miami 1)adcland and North Palmetto Expressway Miscellaneous Beach TOTAL SURVEY OCCUPANCY 1977 1978.% Change 84.4%, 93.6% + 9.2% 86.1% 82.8-3.3% 94.9%. 97.2% .3% 94.4%. 94.3% 0.1 % 93.9% 94.2% +0.3%.' 72.9%, 87.3% +14.4% 89.2% . , 85.8% •- 3.4% 90.4% 97.2% 92.0 97.1% +5.1% 76.2% 84.0 +7.8 % :. Kendall 92.6% 95.4% +2.8% Area 87.8% 94.20 +6.4 82.3% 6.6 THE 'MOSS:,/ FLEMING COMPANY BOCA RATON FLORIDA 33432 GREATER MIAMI OFFICE SPACE SURVEY October/November 1978 RATES PER SQUAREFOOT-.;(Maximum. - Median rates) Location Miami Downtown Biscayne Boulevard Brickel1 Avenue Coral Gables. Coral Way S.W. 1st `; Street North Miami North Miami Beach Miami Beach South Miami` Dadeland/North Kendall PalmettoExpressway Miscellaneous THE MOSS / FLEMING COMPANY 6.125 e. ass 7.00 7.50 Ch` a `0.875. .50 1.375 0.375 0.50 0.50 0.50 0.475 0.'25 1.00 0.50 .50 .50' .63 ay. BOCA RATON FLORIDA 33432 Downtown Biscayne Blvd. Brickell Avenue Coral Gables Coral Way SW 1st Street North Miami. North Miami Beach Miami Beach South Miami Dadeland and North Kendall 19 Palmetto X-Way 13 Miscellaneous GREATER MIAMI OFFICE SPACE SURVEY October/November 1978 No. of Total net sq.ft. d surveyed SLIrl'eYe 23 3,357,824 16 792,595 15 1,347,796 30 1,879,849 3,142,667 656,635 1,309,990 1,772,186 6 114,000 1071400 94.2% $7.00-$ 9.27 $8.00 $6.50-$ 9.27 $6.625 $5.50-$ • $7.50 $5.00-$11.00 $7.475 $7.00-$ 9.10 $7.50-$ 9.50 Lease Rates Leased lkiaximurrt Minimum Space Percent (sq.ft.) Leased Range Median Range 93.6% S7.00-$12.50, $9.50 $6.00-$10.50 82.8% $7.00-$10.00 $8.00 $6.50.-$ 8.50 97.2% $8.50-$14.50-- • 10.50- $5.00-$12.00 94.3% $6.50-$11.25 $8.375 $6..00-$ 9.50 4 78,900 68,900 87.3% 7 144,000 123,605 85.8% 7 175 200 5 353,614 7 294,000 765,862 1,248568 ,8381 95 TOTAL 173 11,536;356 10, 21 THE MOSS/FLEMING COMPANY 170,230 97.2% 343,100 97.1% 246,985 84.0% 730,665 95.4% 1,174,010 94.2% 855 035 86.6 701 408 $6.00-$ 7.00 $5.25-$11.50 $7.25-$ 9.10 $8.00 $6.80-$ 8.50 $8.75 $7.25-$10.00 $7.00-$10.00 $7.50-$ 9.50 $7.30-$ 9.50 $7.50-$12.00 $7.50-$12.00 $6.00-$15.00 $8.00 $8.25 $5.00-$ 9.60 II Median $7.50 $8.80 $7.50 $8.00 $6.125 $7.50 $7.00 $7.75 $8.75 .$7.50 $8.00' Boca Raton, Florid. /1 GREATER MIAMI OFFICE SPACE SURVEY AREA NUMBER OF UILDINGS. SURVEYED Xiai Downtown : 22 Biscayne Blvd. Bricke11Avenue Coral Gables Coral Way and S. t; . l s t St. N. Miar i Beach North Miami Miami Beach . South Miami Dadeland and . Kendall Area. Palmetto'. Area Miscellaneous 12 16. 24 TOTAL LEASED SQ. FT. AREA SURVEYED (SQ.F"i.) 2,885,449 2,267,515 580,807; 419,587 1,347,150, 1,213,260 147,470 55.98 120,450 1,075,195 122565 475.325 LEASED 78.6 72.2 83.2 88.6 3.1 84.9 OCTOBER 1973 LEASE RATES MAXIMUM MINIMUM RANGE MEDIAN , t RANGE •EDL $4.60-$10.50 $7.125 I $4.60-$8.50 '$6.5' $7.60 I $4.25-$8 $4.25-$8 50 $6.50-$9.25 $5.50-$9.00 5.00-$8.00 $6.00-$8.00 8.50 00 i S7.0r. $5.50-$8.50 I$8.00 7.50 $4.50-$8.00 1 $6. { ` 6.375 $5 0.0-$8.00 I$6.OG, 7.00$5.00-$7.60 $6.0e 1 265.<135. 522,950 532, 780 205,945 233.935 : 88.2 383,620.. 73.3 431,`610 81.0 187.545` 91.1 Total. 129 8,260,7801 6,717147; 81.39. Hunter Moss & Company, Inc. 5.35-$8.00 $7.00-$9.50 $6.20-$7.75 4.80-$8.00 $7.75 t $5.00-$7.25 {$7.0 $7.975 i $6.00-$8.50 ► $7.5C $6.80 i $6.20-$7.00 $6„ • 6.50. k $4.00-$7.50 $6.25 2121 Ponce de Leon Blvd. in Coral Gabes Miami Fi.,-.+., ^ �.� etc OFFICE SURVEY FOR THE GREATER MIAMI AREA (Excluding Miami Beach, Cutler Ridge and Homestead; covering the period of July F, 1977 through June 30, 1978.) Prepared by : THE CLARK-i3l0N0I COMPANY, To qualify the results of the survey, 142 office buildings and office parks were considered. They contained total rentable office space of approximately 11,800,000 sq. ft., both owner -occupied and multi -tenant buildings, excluding government owned properties. Approximately 80% of the buildings surveyed contained total office space in excess of 25.000 sq. ft. 56% exceeded 50,000 sq. ft. and 30%, 100,000 sq. ft. The separate office areas studied together with occupancy and rental rates are shown as follows: SCHEDULE I' Rental Rates Quoted Occupancy Low Huh 25 91 $7.50 $12.50 18 96 9.25 12.00 96 7.00 8.50 9 20 98 .�. 8.00 11.00 9 87 8.00 8.. 50 9 97 8.00 9.60 13 96 7.50 8.25 9 90. 7.00 7.75 5 94 7.00 8.50 12 85 . 6.50 . , 8.50 10 87 _ 7 50 8.50, 83 6.50 8.50 Area b Number of Bldgs and Office Parks SurVeYed DOWNTOWN M I AM I BRICKELL CORAL WAY CORAL GABLES CENTRAL SOUTH GABLES AND SOUTH MIAMI DADELAND - KENDALL WEST MIAMI HIALEAH - NW MIAMI GOLDEN GLADES NORTH 14 I AM I BISCAYNE BOULEVARD 3 MISCELLANEOUS The overall occupancy is estimated to be 92%. This would compare with 85% for the 12 month period ending June 30, 1977, 82% in'1970 end.`78% in 1975. C In comparing this year's occupancy levels and rental rates shown in Schedule 1 with last year, a positive change may be noted In most locations, increasing occupancy for the separate areas varying from I% to 9%,and rental rates from 7% to 14%. Location DOWNTOWN MIAMI BRICKELL CORAL WAY CORAL GABLES CENTRAL SOUTH GABLES & SOUTH MIAMI DADELAND - KENDALL • WEST MIAMI HIALEAH - HW MIAMI GOLDEN GLADES NORTH MIAMI BISCAYNE BOULEVARD MISCELLANEOUS SCHEDULE 2 Percent Increase 7/1/77 - 6/30/78 Over 7/1/76- 6/30/77 Occupancy Rental Rates 7 13 1 I1 8 7 8 12 4 9 2 13 6 .14 10 8 3 8 8 .• 9._ 13.. 17 I0 . Thereare occurred. a number of reasons why_ increase in occupancy and rates has With respect to occupancy: I. New of flee construction is mostly on the drawing boards. The new buildings under construction or to begin within 6 months will not be ready for occupancy until late 1979 or early 1960. Therefore, overall occupancy will continue to increase during the next 12 months. • Private and government interests are spending money rejuvenating the central business dis- tricts of many, U.S. cities. Approximately 700 miI1ion dollars may be spent in Downtown Miaini over the next 5 to 10 years. Generalimprovements in Florida s and the nation's economy. 4. Miami's emergency as an international banking and trade center. Both Edge Act and new com- mercial banks with branches are helping to reduce office inventory. Miami's Latin community exerts a positive influence, particularly. in Downtown Miami, and helps sustain our image as an international center. With respect to rental rates, increases are generally a response to supply and demand. Areas with highest occupancy or greatest increase in occupancy have experienced the highest rental rate increases. For example, Downtown Miami's occupancy jumped from 84% to 91% with rental rates increasing 13%; Brickell,which has had the best occupancy record of any location and now stands at 96%, increased rental rates by ap- proximately 11%; West Miami, particularly between 836 Expressway and tLW 30th Street, has experienced a dramatic change in occupancy, from 80'. to 90% with a corresponding change in rental rates, which increased by 14% To further emphasize the current limited supply of office space, if. you require less than 5,000 sq. ft., your opportunity to locate suitable space is still reasonably good in most locations. 0n the other hand,, if. you need more than 5,900 sq. ft., the selection is limited. We found only 35 buildings in nine locations. For more than 10,000 sq. ft., there arc 15 buildings in eight locations.: if you require more than 20,000 sq. ft., there are 9 buildings in five locations, which compares with 14 buildings in slx office locations last year. The rate of reduction in the amount of available space between 1977 and 1978 is estimated to be approximately 71,000 sq. ft. monthly. This com- pares with 55,000 sq. ft. in 1977; 40,000 sq. ft. in 1976; and 35,000 sq. ft. in 1975. Since the current inventory of remaining space Is approxi- mately 900,000 sq. ft., and assuming no new space is developed in the meantime, our current supply would last about one year. Wo studied several major high rise office buildings in prime locations In Dade County to determine present operating expenses. The rentable square footage ranged from 76,000 sq. ft. to 153,000 sq. ft. Since individual buildings differ in design and efficiency, our estimates of operating expenses should only be used as a guideline. Keeping this in mind, was found the operating expense "norm" to be somewhere between S3.00 and $3.60 per rentable sq. ft. This includes professional manage- ment fccs .ind applies to buildings that are stabilized and in good repair. Between 75% and:80% of the total operating expense is representcJ by just four iicmw.: electrici'ty, jtnit•orial services, real estate taxes, and insurance.. Over; the past three years, building operating and construction cost (labor and materials) have been increasing annually at between 6% and PROPOSED OFFICE DEVELOPMENT IN DADE COUNTY Our 1977-78 Office Survey covered 11,800,000,sq. ,ft. contained in142 buildings as well as office parks. There are•at least.27 new office building projects planned for completion over the next three years. Here are the figures: Construction Started No. of Total Sq.Ft. or Estlmated to Start Office Bldgs. of New Space In next 12-months. Proposed (in thousands) (in thousands) DOWNTOWN M I AM I BRICKELL AVENUE CORAL WAY CORAL GABLES CENTRAL SOUTH GABLES/SO.MIAM1 DADELAND/KENDALL WEST MIAMI HIALEAH/NW MIAMI GOLDEN GLADES NORTH MIAMI BISCAYNE BLVD. TOTALS 155 1,090'. 25 710 409 90 1,135 25. 3639 I,895 A portion of this new space estimated between 15% and 20% will be occu- pied by the building owners. This still leaves approximately 3,100,000 sq. ft. for lease to other tenants. In 1970-72, space was absorbed at the monthly rate of 60,000 - 70,000 sq. ft. This dropped to 30,000 - 40,000 sq. ft. In 1973-75. If we estimate future absorption at between 50,000 and 60,000 sq. ft. per month, the new space totals 4,000,000 sq. ft. when added to the current inventory of 909,000 sq. ft., and equals a six year study of office space. In addition, there are a number of major office sites owned by developers and land speculators ready and waiting for the opportunity to develop. For example, Brickell;Avenue, which is considered one of the best office locations, has at least 10 sites. They could support 1,500,000 to 2,000,000 sq. ft. Some will be developedover the next three to five years. There are at least four to five potential sites in Coconut Grove for future development: (1) Coconut Grove Bank, (2) J. M. Kolisch, (3) Coconut Grove Theatre, (4) Taurus Reslaurant,.and (5) Main and Fuller. Although we know of no immediate plans to build. FORECAST IN RENTAL RATES the rental rates for typical office space In multi -story buildings wil be=SII.00 to $14.00 per sq. ft. This would apply to Brickell Avenue, Downtown Miami and Coral Gables, and includes full services. ,Parking will probably be an extra at $40 to $60 per space monthly. For example, the rates now quoted for typical office space in the Flag- ship Building (approx. 300,000 sq. ft. under construction at SE Sth Street and Brickell Avenue) is 510.50 to $12.50 per sq. ft., fifth through thirteenth floors. Tenants will pay for their pro rata share of common areas on their respective floors, increasing the rates by approximately IOp, say, $11.50 - $14.00/sq. ft. The variance in the rate is dependent upon the height and view. Parking will be in addi- tion at $30 - $45 per space, and tenants will be allowed to lease seasieg space per 400 sq. ft. leased, or one space per 350 sq. ft. If a full floor. Typical escalation clause in leases charge tenants for any increase in real estate taxes and utilities o'erthehe basesese year. In addition, an annual Consumer Price Index will app Y to rate. New buildings located in suburban business centers and office parks will rent typical space at $9.00 to.$11.00 per sq. ft., full services. Parking will be included in most cases and tenants will not be charged for common areas. Escalation provisions will generally be based `upon.prorata iratleshhare in operating expense increase with a Consumer Price Index app renewals and leases after the fifth year. A new suburban office of 60,000 sq. ft. (two 30,000 sq. ft., two-story buildings) is under construction on West Sunset Drive at 93rd Avenue. The current rates quoted are now $9.00 per sq. ft. The project will be completed in February, of 1979.`Tenants are given free parking. Leases provide for annual escalations based upon operating expense. The CPI applies when leases are renewed. Koger,Office Park in West Miami will quote $9.00 per sq. ft. after January 1, 1979. With respect to "Office "in the Grove" located on South Bayshore Drive at 27th`Avenue, the owners'. have, stated that new leases will contain an annual escalation of both oporating cost and Consumer Price Index. a`'Al- though the building is fully occupied, we are told that any new space will rent at'$12.00 - $15.00 per sq. ft. plus parking which is<$60/ space/month currently. f F1Cil1i II ' ' C"�`Ci t'� �� �'1�.. NEWSLETTER Increased Occupancy 1 Tight Market Ahead Overall occupancy of office space showed a marked increase between July 1, 1977 and June 30. 1978 over the previous 12-month period, according to the Clark-lliondi Cont- ;1 , pany's Office Survey for Greater Miami. i The survey was based on 142 office build- '1 ings containing total rentable office space of 1 11,800,000 sq. ft. of both owner occupied and multi -tenanted buildings. Government owned properties. as well as properties in Miami ;j Reach, Cutler Ridge and Homestead, were not included. . s Area sand number of Buildings Surveyed 1 Downtown Miami (26) 91 1 Drickell (18) 96 orrl \Vay (9) 96 1 al Gabtcs Central (20) 98 t Ca Gables & S. Miami (9) 87 1 L)adeland-Kendall (9) 97 1 West Miami (13) 96 1 tlialcah-NW Miami (9) 90 Golden Glades (5) 94 S North Miami (12) 85 1 Biscayne Blvd. (10) 87 Miscellaneous (3) . 83 Rental Rates Quoted • Low High S7.50 $12.50 59.25, S12.00 S7.00 58.50 58.00 S11.00 58.00 58.50 S8.00 S9.60 57.50 S8.25 57.00 S7.75 57.00 S8.50 S6.50 58.50 S7.50 S8.50 S6.50 58.50 Current occupancy is estimated to be 92 per i cent compared to 85 per cent for the 12-month period ending June, 1977 and 78 per cent in 1975. Occupancy increased dramatically in Downtown Miami, Coral Way, Central Coral Gables, West Miami, the Northwest, Hialeah •and Biscayne Blvd.. which have shown from 6 to 10 per cent gains. These gains may be :it- 1 tributable to renewed interest in central. busit,essdistricts, special interest generated by I Miami's Latin Community and to branch tanking and Edge Act b:utks creating a uew` and substantial market of space users. These factors. coupled with a generallyimproved economy and an ahnost total lack of new office construction, account for much of the i • rise in occupancy. The rate of reduction of the amount of a''•rilable office space between 1977 and 1978 stimatcd at 71.000 sq. ft. per month compared to 55,000 sq. ft. monthly in 1971i- 77.40,0110 sq. ft. from 1975.76 and 35,000 sq. ft. from 197.1-75. Based on a cttrrcnl inren- lury of approximately 900,000 tcmauling . �. '.lL:'• r.Y•y: VOL. 8 / NO. 1 •! li,;ci!!t)'r�/f��31i1T31?if�1;+11�r�j�arjinnt The Atrium Office Park 3900 N.W. 791h Avenue One aj Uucle Couur,r's hest lurarecl a//ic e•�,rrr h t i.t I'eI:irr),� belre ► 1r,crNc rl crl(rhr t role. The• Arriwrl, u`126.000 ayuare /save .i.0 r-huilrhu4' c..i.00 o/'the /'ulnu•rru F..r/rr� sstrri►`c,u.A'. II t6rle Srree r irl rhe• hc•a� l of 1 r�rpicll. r1e► elryii�ig as en. Wirh ample rprkbrg and rr grrrd'i: ; erri►rt,'. the :1►riuur'.c cic�ic;hhors inrlur e: the 'cde sal Rccerv�' ikitik;'tir,nrlrri �r Re Il. fii rite 'S�'.elrrn� .cr�t'e..u1,ietr hnuks, unit urr the %rsure .sole, the Dorsal Gall'ahrl Coe"rarr;t clul'. 'list C'lur-7ficirirli Curirliui1 i `i.v the aanagurgrnul leasing agent:: hi,r i,ifi010iuiuu The rri'ent. un rental •• rentable square feet, and ;assuming no, new space is developed in the mean;` time, our present supply wouldbe exhausted iu montlis. .Several rn:tjor new projects me now on the thawingboanls or Under coustnictioo itt Downtown Miami, Itrickell Avenue and Central Coral Gables that will add about S00,000 sq. ft. • Willi the majority of these projects slated • for cuntplctiun in 1'180. only limited space will be available toward the end of 1978 into 147'+ resulting; in au extremely ; tight office nt:uket for (.;rcater f`Vii;+14 ii A'4., tw1;m ni, f�lc�rida Lauer Appo nfcd by CSA I .'truc.t 1 :utcr, a partnerancl head of the Clark-Itioutdis property Inanalctnent di►•icinn,' has beet, appointed to the General Services ; Ad dniini.tratioji's Itegiona1 Public Advisory I'aute1on Architeclur:t1 anti Iin- gincering Services by GSA Adniioistrator .lay Solomon: • 1.uucr, who will represent the Ituihling Officers:rnJ NIan;gcre A'su.iatioii(ItU\1:\), Is veteran in the huiltling toan.11:eiticnt field with degrees itt business adntittist(:itiun and acconntint;. 33131, 1'eleptiofne (305) 374-2111 z i Associates, 1 4 RESOLUTION NO. THE CITY MANAGER IS AUTIIORIZED TO DRAW UP ' AN AGREEMENT WITH THE DEVELOPER, ttIAMI CENTER ASSOCIATES, LTD., ET AL, TO FINAt1CC_ AND DEVELOP TIIE MIAMI WORLD TRADE CENTER BASED "UPON COMMIT; ME:NTS PRESENTED TO .TIIE COMMISSION ON JUNE,'4, 19.79. SUBJECT TO FINAL NEGOTIATION AND -APPROVAL .BY.THE CITY COMMISSION. WHEREAS of Miami/Universi the City of Miami took bids”" for the-develolinent" of the City ty of Miami 'James. L. Knight WHEREAS , competitive a right of over the the agreement entered into as a result "of these bids gave the developer Miami Center Associates, Ltd., first refusal for the development the air site owned by. the City for the development of • garage;' and WHEREAS, the:City the development plan and and rights the Center Commission received by Motion 78-727 feasibility study for a World Trade 0 Center, WHEREAS, Dade Federal Savings and Loan has offered:. finance_the`.:constructiion o officespace, of which World ..Tra development action "requires approximately 450,000 square feet 300,000 square feet is to. be used for a a e Center, subject ;to receipt by the City of an urban action grant; and WHEREAS,. the City, has applied for an urban., grant in the amount` of $7.4 million; and WHEREAS,, "the;. Department- of ` Housing. certain basic information, including the. terms of: and Urban* Development the agreement between the, City and Miami.:: Center Associates, Ltd construction of a World Trade Center in order for them. to the %rant, approve the, urban,;developmentaction" NOW,: TIIEREFGRE," BE IT RESOLVED BY THE. COMf4ISSION OFTIIE CITY OF t4IAMI, draw Ltd. FLORIDA: Section 1.. The City. Manager is hereby authorized to up an agreement with the developer, Miami Center et al, to finance and develop the Miami World Trade Center • development tl 1 CITY OF MIAMI/UNIVERSITY OF MIAMI JAMES L. KNIGHT INTERNATIONAL CENTER An Independent Business Approach a.i. d Alf . THE CITY OF MIAMI/UNIVERSITY OF MIAMI JAMES L. KNIGHT INTERNATIONAL CENTER AN INDEPENDENT BUSINESS APPROACH: Management Services for the Hospitality Industry I GENERAL BACKGROUND INFORMATION ON HERITAGE MANAGEMENT SERVICES, INC . AND ITS PRINCIPALS'; "HMS" INVOLVEMENT WITH CITY OF MIAMI III.: SCOPE OF ENGAGEMENT IV. SUMMARY OF FINDINGS AND Background Information on HERITAGE MANAGEMENT SERVICES, INC. AND ITS PRINCIPALS Heritage Management Services, Inc. (hereinafter referred to as "HMS") . is an Ohio Corporation organized in 1973 by William J. Burns and Henry M. DeSantis. The Company renders management, consulting and accounting services principally to the hospitality and/or related industries. It owns and manages both nationally renown franchise hotels and inde- pendent hotels. Properties currently under "HMS" management include: The Peoria Hilton (300 rooms) in Peoria, Illinois; the Gainesville. Hilton (208 rooms) in Gainesville, Florida;. TheHyde Park Hilton (340. rooms) in Chicago, Illinois; Caberfae Lodge and Lanes (66 rooms) in Cadillac, Michigan. Properties formerly managed until sold by ownership include: Hilton Inn - Detroit Metropolitan Airport (208 rooms) in Romulus, Michigan; The Mount Laurel Hilton (310 rooms) in Mt. Laurel, New Jersey; and The Cleveland Plaza Hotel (originally900 rooms beforeconversion tohotel/ office complex) in "Cleveland, Ohio; Parkbrook °Inn (150 rooms) in Cleveland, Ohio. Related to its current activities in hotel management, "HMS" recentlyprepared."a market:study'for the City of Peoria, relative to the. Cty's plans to develop a$58 million convention center/sportscomplex.Inaddition, "HMS" has" recently. consulted. with the City of Atlanta, Georgia, relative";to;-plans` to develop a hotel adjacent to Atlanta's Convention Center. THE PRINCIPALS" "HMS" is headed by William J. Burns, veteran Hotelier, who serves as President, and H.M. "Bud" DeSantis, a Certified Public Accountant, who serves as Executive Vice President and Treasurer. The followingis a brief career history of BURNS and DeSANTIS. Page 1 WILLIAM J. BURNS, PRESIDENT Business History. 1972 Present: 1945 - 1949:. 1941 President of Heritage Management Ss, Inc. In the business of merging, buying, selling and managing hotels and motels. Presently have four hotels under manage- ment contract, and several accounts which we serve,as consultants. AMBASSADOR HOTEL Los Angeles, California President PLAYBOY CLUBS. INTERNATIONAL International Director Directed activities of clubs and hotels (19 in all) including Montreal, London, Jamaica, etc. PICK HOTELS CORPORATION Executive Vice President (32 hotels and motels) HOTEL CHICAGOAN Part -Owner, Vice President General Manager This 500 room property was 1953 by the First National expansion program. HILTON HOTELS CORPORATION Assistant Vice President of Eastern Division, with offices at Plaza Hotel in New. York City. Operated - with Vice President of Division - Plaza and Roosevelt in New York Mayflower in Washington Palm Beach Biltmore Dayton Biltmore Neil House in Columbus, and purchased in Bank for its four properties in Bermuda;(St. George, Castle Harbour, Bermudiana and Mid -Ocean Club) Air Transport Command From Private to Major, at time of discharge. Two and a half years' foreign duty. Awarded Bronze Star with Oak Leaf Cluster. WILLIAM J. BURNS, PRESIDENT Business Career and Service Activities: President and Chairman of the Board - American Hotel and Motel Association President and Director Greater Chicago Hotel and Motel Association 1 Chairman, - Convention and Visitors Bureau of Greater Cleveland Chairman American Hotel Educational Institute Director.-" Illinois Hotel and Motel Association Director - Chicago Convention Bureau Director Hotel Red Book Corporation Director Culinary Institute Member of Board of Advisors Statler Foundation Commissioner,- U.S. Pavillion, Expo 67', Montreal Director - Cosmopolitan National Bank, Chicago. Member' .- Hotelmen's Hall of Fame H.M. "BUD" DE SANTIS, EXECUTIVE VICE PRESIDENT Mr. DeSantis is a Certified Public Accountant, a member of the American Institute of Certified Public Accountants, the ohio`Society of Certified Public Accountants, and the International; Association of Hospitality Accountants. Executive Vice President and Treasurer of Heritage Management, Services, Inc. Responsible for hotel -operations.and all economic feasibility plans for current and prospective hotel projects. Mr..DeSantis served as Assistant Comptroller for ITT Sheraton Inns, the Motor Inn. Division for ITT Sheraton Corporation, from July, 1968 to April, 1972. His responsibilities in- cluded the supervision of the day-to-day financial operations of twenty company - owned inns in fourteen cities throughout the United States, including Los Angeles Airport (565 rooms), San Diego (360 rooms), Denver (260 rooms), Cleveland (five properties including Hopkins Airport), New York City (at LaGuardia and 42nd Street in Manhattan), St. Petersburg, Florida (resort property). His responsibilities included the central- izing of accounting for all Sheraton Inn .acquisitions which resulted in payroll savings of $250,000 annually. He directed the staff in annual budget preparations and monthly forecasting for all Inn properties. While he supervised the preparation of all State and Local taxes for the Inns, he personally handled all Federal Income Tax matters including Internal Revenue Service reviews (audits). In addition to his experiences in hotel acquisitions, he also handled the financial transactions for the sale of four ITT properties, including three in the Cleveland area, as well as the St. Petersburg resort property. His overall experiences with ITT Sheraton gives Mr. DeSantis a superior background in all phases of hotel/motel management. Page 4 EXECUTIVE VICE PRESIDENT Immediately; prior to his tenure with ITT Sheraton, Mr..DeSantis was associated with the international accounting firm of Arthur Andersen & Co. in the Cleveland office, from, July, 1965 to July, 1968. It was here that his background in accounting systems, procedures, audits and all phases of taxation was developed. Page 5 RELATED STAFF WILLIAM T. HURST Senior Vice President Marketing/Development. - Mr. Hurst holds a B.A. degree from the University of.Chicago, a J.D.; degree from DePaul University, and is a member of the Illinois State Bar. Presently Senior Vice President Marketing/Development of Heritage Manage- ment Services, Inc., basing in Chicago. Prior: Mr. Hurst was Executive Vice President of the hotel management subsidiary of Interstate United Corporation. He devel- oped management and consulting contracts with hotels in thirty states, Canada and Puerto Rico - including all major franchises - with clients such as Inland Steel and Bank of America. He supervised all operating surveys and initiated all marketing plans. His prior hotel experience included direction of operations and marketing for both a major Illinois development corpor- ation (Hollywood Builders) and a midwest hotel chaim (MetroAmerica Hotels Corp.) including hotels from 75 to 1,200 rooms, such as Chicago's O'Hare, and four other Sheraton franchises, several independents and the Sherman House. He was former North American Council Chairman of Sheraton Inns, Mid -Continent Chairman of Sheraton Inns (twice), and President and Chairman of the Board of the Greater Chicago Hotel and Motel Association (twice). He is currently a director of both the Illinois Hotel and Motel Association and the Chicago Convention and Tourism Bureau. Early in his career, Mr. Hurst was Vice President and General Manager of Chicago's 400 room Hotel Knickerbocker (now the Playboy Towers) and is a former Naval officer, having served aboard the USS Yorktown and on the flag staffs of Commanders Carrier Division 17 and Task Force 77 and receiving an Admiral's commendation. Page 6 VERNON HERNDON Vice President - Business Development EDWIN BRUDER Vice President House Counsel JOSEPH°MANDARANO Accounting. and Internal Controls Recently retired as Senior Vice President of Hilton Hotels Corporation, Mr. Herndon Provides Heritage Management Services, Inc. with the expertise of the truly professional hotelman. His entire life has been spent in the hotel industry and, like so many of the hotelmen of his time, worked his way through the ranks to the top. Prior to his tenure in the Corporate offices of Hilton Hotels Corporation,;:Mr., Herndon operated several of the famous hotels in the United States, one of which was the world - renown Palmer. House, in Chicago. He is a Past President of the American Hotel and Motel Association. Holding a L.L.B. degree from Kent College of Law, Chicago, Illinois, and membership in, the Illinois; State Bar, Mr. Bruder is Vice President/House Counsel for Heritage Management Services, Inc. Mr. Bruder most recentlY served as Vice President - New Development for Playboy hotels and clubs for eight years. He was responsible for real estate acquisition, hotel planning, construction, leasing and operations. Immediately before joining Playboy Enter- prises, Mr. Bruder was Vice President -Market- ing, -for Budget. Rent-A-Car Corp. of America, and served in that capacity almost from the inception of that business in 1962 until the business was acquired by Trans -American Corporation in 1968. Mr. Bruder successfully ran his own manu- facturing enterprise for many years before that, as an entrepreneur. Mr. Mandarano acts as "right hand" to Mr. Bud DeSantis, Executive Vice President and Treasurer. Prior to his affiliation with Heritage, Mr. Mandarano had been the Con- troller for the Sheraton Inns Division of the ITT Sheraton Corporation and prior to his tenure with Sheraton he was employed with the hotel accounting firm of Laventhol, Krekstein, Horwath and Horwath for six years. Mr. Mandarano is knowledgeable in all phases of hotel accounting, internal auditing and operational controls. Page 7 II. "HMS" INVOLVEMENT WITH CITY OF MIAMI Since "HMS" had recently completed a market study for the City of Peoria relative to its $58 million proposed Convention Center/Sports Complex and since "HMS's" President, William J. Burns had served as Chairman of The Convention and Visitors Bureau of Greater Cleveland, "HMS" was contacted in early May, 1979s by Joseph P. Binns, retired Senior Vice President of Hilton Hotels Corporation,who presently resides on Indian Creek Road, Surfside. Binns.inquired as"to.whether "HMS" would undertake a study Miami/ the City of Miami relative to the proposed City of of Miami James L. Knight International Center. Next, "HMS" was contacted by Mr. Dan Pau relative to the proposed Project. for University Thompson of Miami, Once again, attorney with Paul On May 11, 1979, Mr. Burns flew into Miami and met with the following individuals: Mr. Dan Paul, Mayor Maurice. A. Ferre, Mr. Joseph R. Grassie, City Manager Mr. James J. Connolly, Project Director Convention Center and Mr. Vincent Grimm, Assistant City Manager. It was agreed at that meeting to retain "HMS" as an independent third party, to review the related documents regarding the proposed Convention Center, and to express its business judgment as to whether or not, the City has entered into an Agreement that is favorable to the City's Parties concerned, with particular emphasis on all position. Page '8 III. SCOPE OF ENGAGEMENT "HMS" was engaged for the City of Miami by Joseph R.,Grassie, City Manager, to comment upon, as an independent third party, to review the related documents regarding the City of Miami/ University of Miami, James L. Knight International Center, and to express its business judgment as to whether or not the City has entered into an Agreement that is favorable to all parties concerned with particular concern for the City's position. No particular concern was given to the legalities of the ehPd ject, as it` was assumed that all. pertinent City passed, and all related legalCounsel` had complied with same. No attempt was made to duplicate those services already rendered or to be rendered the City, i.e., Market Feasibility (Gladstone Associates) or an Economic Feasibility Study (Laventhol.& Horwath). Nor was "HMS" asked to respond singularly to the conclusions set forth in these Studies. "HMS" has relied on the:City's sound judgment and the professional reputations of these firms, and their related conclusions. "HMS" did try .to develop the correlations among all Studies; and aspects of the Project in order to render a sound business judgment to assist the City. Consequently, the following documents were received by "HMS" for review: (1) City of Miami/University of Miami James L. Knight International Center. Request for Proposal (issued sometime, between' June, 1977 and September, 1977) ) Agreement between University of Miami and City of Miami, dated April 1, 1977 (3) Market Feasibility;Study 1977 JamesL. Knight International Center` June, by: Gladstone' Associates (4) A. Development Proposal (ExecutiveSummary) by: Worsham Br -others & Co. and Turner Development Co.- (Co -developers) (undated but assume submitted prior to City request date of September 16, 1977) (5) Lease and Agreement For Private Development Between City of Miami and Miami Center Associates, dated April 20, 1978 (6) Amendment No. 1 (To Lease and Agreement, for Private; Development) dated September 29, 1978 Ltd., Page 9 1 III. SCOPE OF ENGAGEMENT (CONT'D.) (7) Construction Management Service Agreement between City of Miami and Miami Center Associates, Inc._ dated April 20, 1978. 8 Proposal for James L. Knight International Center City of Miami by: Laventhol & Horwath dated March, 1979 Conference/Convention Center and Garage - Financial Concept Memo by James J. Connolly, Project Director Convention Center to JosephR. Grassie, City Manager, dated March 2, 1979 (9) (10) City of Miami/University of Miami 608/630 Room Pro -Forma Ten Year Projection with 7% Annual Inflation Factor Undated and prepared by James J. Connolly Projected Receipts in Direct Payments from Private Developer of Hyatt Regency Miami to City of Miami And Additional Tax Revenues To Community. Undated and prepared by James J. Connolly. (11). NOTE: The Economic FeasibilitY Study to be submitted by Laventhol and.,Horwath was uncompleted at the time of our review. However,; in discussions with James J. Connolly, "HMS" was advised that the Laventhol and Horwath Study in its completed form, would not be materially different from those projections prepared by Mr. Connolly and submitted to "HMS". Page 10 C IV. SUMMARY OF FINDINGS AND CONCLUSIONS Each of the Documents listed in Section III of this report (Items 1-11) were revieiedoinok dea'stail.far Again, ththese Documents were given a critic of Miami was concerned. Uppermost in our minds were the follow- ing three factors which we,feel efectithe n eaCity the mostessary (1) Assuming the City is successful Capital Improvement' Funds via a sale, of Lease Revenue Bonds, will sufficient Revenues be generated to le the City to cover Debt Service requirements (payment of Current Interest and Principal Liquidation), (2) Can the operation of"the C�ovntion requireClarge subsidies, enter ever be self-sustaining so as not from the "City, ) Impact of the entire Project on the overall economy of the City of Miami. With the above in mind, we have relied heavily on the financial projections of �Mr. James J. Conn�llY, Project Director, including the Statement of Sources and Disposition of Funds, d the Tenhe eaYear Projection of efvethe nue Expenditures andHyatt DebtHotel, Service Year � Projection�;of Revenue P require- ments. It is our understanding that the completed Laventhol & Horwath Study" will not be materiallydifferent from the projections of Mr. Connolly. We have discounted completely '.the rfinancial loimpact of the University '`of Miami's Conference :Cente aspect ll Project. Since the University" has already fundedned $3,2500,000with for its portion of the Project ($2,50ra00 750,000 remaining for Furniture, Fixtures and Equipment) and since 'the construction estimates agree, the eiplus ng sheoethere Cityoisctis the interest earned on the $2,500,000 construction period. Upon occupancy, the University will be responsible for Utilities, Custodial Service," and Staffing,. Thus, there is no cost to the City for the Conference Center. We feel that the University 'screating a demand Presence can do nothingd for but both compliment-theentire Project". by hotel rooms and convention space rental, while prestigeadding' to the complex. The remainder of the City's portion of the Project, i.e., Convention Center and Parking Garage will deminand3Lev l Debt Service Payments of $2,754,000 co . (The Third meats for the construction Year of operation). Debt Service pay period and the first Two Years of operation will total $16,756,000,. with $3,038,000 projected as Net Revenue from the Convention000 Center/Parking Garage operations and the remainder of $13,7 8 8,000 coming from the Funded Reserve Account. (Actually, $13,718,000,deficit, $8,000,000 will be funded as follows: IV. SUMMARY OF FINDINGS AND CONCLUSIONS (CONT'D.): $5,000,000 from the Developer, $2,500,000 Prepaid Rental Payment from the University of Miami, $500,000 in Interest Earned on the Invested Funds.) The remaining Debt Service Deficit of $5,718,000 will come out of funds remaining in the Capital Improvement Fund and part of the proceeds of the Lease Revenue Bond Issue. Operating Years 1983, 1984, and 1985 also are projected as Deficit Years in the amounts of $657,000, $366,000 and $103,000 respectively, again, these deficits are covered by the Funded Reserve Account. In Years 6 through 10 of operation, substantial positive Cash Flows are projected (from $162,000 in Year 6 to $1,277,000 in Year 10.) The projections' also indicate that adequate reserve funds will remain even after. the Deficit payments are made for the first Six Years (one year-constructionand five years -operations). The Funded Reserve Account will total $3,254,000 and the Bond. Reserve (Capital Improvement'' Fund) will total $2,866,000. Thus, if the projections would hold true, the Project would be viable and profitable to the. City. At this point, we would like to comment on Mr. Connolly's projections for the Hotel Project, which of course, will generate substantial Rental Income for the City. We are commenting, based on our experience in Hotel Management, Marketing and Finance. In Hotel operations, profits come mainly from the sale of guest rooms. A good, lean Rooms Operation at a respectable occupancy level, say 70%, will return an 80% Departmental Profit, whereas a successful Food Operation will return 10-15% Departmental Profit and a successful Beverage Operation will return 40-50% Departmental Profit. Thus, the most vulnerable area of a Hotel's revenue projection would have to be rooms. Taking into consideration athe esMarket etes, Feasibility Study, prepared June, 1977, by te which states "Miami's average occupied room rates are typically lower than either Miami Beach or the remainder Dade County by 20 to 25 percent. Additionally, Miami has been able to enjoy a;steady, year-round occupancy of approximately 76%", our concern turned to the projections of Average Room Rate and Percentage of occupancy. The Connolly projectionscommencing in 1981 reflect an average rate of $63.71 and occupancy set at 70%., The projections for average rate increase by a compounded 7% for the remaining Nine Years' (so-called inflation factor), and occupancy increases by 2points each year until 80% is reached in 1986. (The Sixth Year of operation). We feel that the Average Rate projections could be a little optimistic forMiami'sPresent market, but that occupancy should climb to 80% in the first stabilized ,year . of . the Hotel's operation (perhaps as soon as mid-1982, but not later than 1983). IV. SUMMARY OF FINDINGS AND CONCLUSIONS CONT'D. We also feel that new markets will wealso becreated ffor eel the eongly, Hotel simply through the University. And that the Hyatt name, itself, will enable the Hotel hiotatiain if higher than average room rates. Thus,Miami's rates were relied on solely asyardstick "forofuture e,hot induce development, it would be difficult; if nota developer to construct a hotel at better than $53,000 a unit in, Miami. Thus, we conclude, that Hyatt, internationally known for its spectacular hotel amenities will both commndl ge rate and �� a higher:` than _average .;occupancy - e Connolly projections are attainable. Next, we turn to the area of the projectionInwhichOareinast important to the City, i.e., Rent; to the City.e Lease and Agreement for Private DevelOPmtSbetween thre,Citygand Developer,. dated '; April 20, 1978 as amended, paid the therewere three potential calculations tof20�Rent oftNeteOperatingCity: (1) Section 4.2A called ,for Operating Limited Partner Preference Debteral tner Return). Partners Preference (2) Section42B calling for various percentages from 0-5% of, Gross:.' Room Revenues to be paid fasmRe150,000 in the`First Year to ent. (3);Minimum Base Rent ranging $250,000 in the Ninth. Year. We understand that negotiations are pprese ntl3)yaundeunerway between the City and the Developer to eliminate ely the Minimum Base Rent. Reasoning here is that since point (1) will probably be greater anyway and therefis no s noeRealyEstatefTax a Abatement for the Developer, it is way something. At this point, we agree with the City's stand on eliminating the Minimum Rent. For we fe ln thatordeato privateee developer must be given some financial incentives him to proceed with the Project. For the first Ten Years, the elimination of Minimum Base Rent $2,000,000 or an average of $200,000 per year. However, fo tthe Real Estate Tax Receipts However,�for.the first Ten Years, projected to the City total $11,576,000, or an average of $1,157,600 per year. -At this point, the City is $957,600 ahead for each of the Ten Years, on Real Estate Taxes, alone, without any rent! Based on all of the foregoing comments, we feel the City should come out well. However, we'd like to point out one eearea ated we disagree with in the Agreement. Rent to the City isApredicated upon of Net turnatontherofit Developert(Investors) before Rent is permitsment ca 7. rto calculated. If this 7alo Preference wouldtbendueuthebCityveachfand City Rent, an addition $ , every year. We know that this is a negotiable item but it should be pursued. IV. SUMMARY OF FINDINGS AND CONCLUSIONS (CONT'D. Replacement Reserve - Hotel The Agreement between the City and the eDevelopens byce callselofor the establishment of Annual Replacement in the amount of $300 per room. These onl rbeerves are to be expended;by themDeveloper aintained im a separate bank account and may Y for the Furnishings and Equipment subject s tordeteriwouora ion amount as a result of ordinary wear and tear. $180,000'per year. Assuming continuous compounding of interest, 2,500;OOO,in 10 years. This, we this reserve would build to say $ tears. This, we feel would be inadequate ioriginallace costfofnthe1Hotel's'.Furniture, nual Inflation and the g Fixtures and Equipment. We feel that the Replacement Reserve should be accelerated rapidly after the oHotehapsoperation has room. stabilized, probably "in 18-24 months, $ Convention Center Operation Our next concern for the City deals with the day-to-day operation of the Convention Center enerateeoperatingnprofits forthat Vtheion Centers; in major market areas g citiesin which:; they are located. Chicago is the Oprime example, followed by. cities such as, Houston and Atlanta. On tn elotaernd's huge operating :deficits 'are„consistently generated Convention Center. This is do in part to severe midwestern Winters and a lack of prime hotel space, in the downtown area. 'However, Cleveland continues =.to. subsidize ;<the 'deficitS dUe ton tthe overall positive impact on downtown business, i.e., Stores, etc. The projections which we reviewed, again prepared by Mr. James ual t Conventi Project Manager, reflect operating expenses equal to Convention Center saleh•Pofit arerlocaltintnaturevenln addition, Center comesfrom� Special Events, whit the Parking Garage is also .projected as a profit center. We feel that the Convention Center's fortunes will rely on the following factors:...ressve marketing (1) Adequate funding for operations (2) Aggpromotion for 12-18 months of pre -selling. (3) Strong including 's continuing education local events (4) Success of :the University programs and (5) Coordinated selling on thepart of the Hyatt Hotel. The City should be prepared to. allocate itthesubulkcess oinf its 2%on to Hotel Room Tax to the.Center g utilizing monies from the Funded Reserve, if permitted. Our conclusion here is that the goal sthoue ld xpayers be to Aoferate e a First Class , facility at a minimum cost City of Miami. This, we feel,will be accomplished in the first 18'-24 months of operation IV. SUMMARY OF FINDINGS AND CONCLUSIONS (CONT'D.): The Parking Garage has to be an instant winner. Present Agreements between the City and the Developer and the City and • the University call for a daily demand of 500 and 300.spaces respectively. The Garage Operation should be the least of the City's worries. Impact on City It goes without saying, that the presence of an $86,000,000 Convention. Center/Conference Center/Hotel Complex will add much prestige tothe City of Miami.. In additiofl, another tangible benefit to the City will be the infusion of millions of dollars annually in overall spending in the local economy. In addition to the "new" dollars expendedin the Hotel, and _the ."new" dollars expended exclusive of. the Hotel, the City's economy will experiencea" "Multiplier Effect". As people spend money in the Hotel, Restaurants, Lounges, Department Stores,etc., a new demand is created for the various suppliers, such .as food purveyors, supplies purveyors, etc. The Multiplier Effect can be substantial, and shouldcontribute to local employment. Thus, the tangible benefits to the City will come from increased employment, and, increased Real Estate and Sales Tax Revenues, which are a direct benefit to all of Miami's taxpayers and citizens. We have tried to be brief and specific while addressing ourselveS to the question put to us. In additiOfl, we sincerely believe that all of therequisite ingredients for a successful Project are, indeed, present, i.e., a great City, a great University, a top quality Developer and an outstanding Hotel Company. We are proud of our participation andhope ,that "our small_ contribution aids in .the overall success of the Project.