HomeMy WebLinkAboutR-79-0340"SUPPORTIVE
DOCU M ENTS
FOLLOW"
RESOLUTI-ON.NO
79 340
A RESOLUTION CLARIFYING THE DEFINITION OF
"GROSS SALES; ASUSED IN ==THE LEASE AGREE-
MENT DATED APRIL 1, 1976, .;BETWEEN GROVE KEY
MARINA, INC. AND THE CITY; AND APPROVING
A SUBLEASE BETWEEN GROVE KEY MARINA, INC.
AND EAST COAST MARINA, INC. IN ACCORDANCE
WITH THE TERMS AND CONDITIONS OF THE , ATTACHED
LEASE AGREEMENT.
"gross sales"
WHEREAS ,
as used
it is`desirable ,to clarify the definition
(hereinafter the Lease)
Grove Key) and
premises lease
the City
dto Grove Key Marina, -Inc. for the operation o
the;. Lease Agreement dated April
between Grove
Key Marina, Inc..
of
1976,
(hereinafter
f Miami (hereinafter the City) for the
small boat waterfront facility; and
WHEREAS,`
t "h a s
been the intention
of Grove Key that ' the City was
of` the City; and
and is to receive
10.3% _;of `a11
monies
actuallyreceived by Grove Key in connection' with its operation
the Leased facility and Grove Key was soadvised by the City
by letter dated June 15, 1973; and
WHEREAS, numerousaudits by the City have
of
Manager
demonstrated
that Grove Key has consistently paid 10.3% of all monies actually
received by it.arising out of its operations on the premises
presently in full compliance with its -Lease.
NOW, THEREFORE., BE IT RESOLVED
CITY OF MIAMI',
FLORIDA:
action 1. That the Lease
and the City shall be interpreted
and is
BY THE COMMISSION OF THE
"DOCUMENT INDEX
betwl ePG Nge
r•
a ,
so as to require the payment o:
10.3% of. all monies actually received by Grove Key except asother-
wise specifically agreed upon by Grove Key and the City acting
through the City Commission
Section
That Grove Key
hereby .authorized to
enter into that sublease agreement with East Coast Marine,: Inc.
Florida corporation, dated May,22, 1979 a copy of
which is attached hereto and'to make payment o the City in
nc.
accordance
CITY COMMISSION
MEETING OF
MAY2 2 ltii
�a:mPNo.7 9.-..3 4
with
said Agreement.
City,Cler
PREPARED AND APPROVED BY:
Terry V. Prcy
Assistant City Attorney
APPROVED AS TO FORM AND CORRECTNESS:
Geor
City
F. Knox,
ttorney
1979.
79.340
City of Miami, Division of Internal Audit
Department of Management and Budget
Howard
V. Gary,
Period
Ending
3-31-74 Everglades Marine, Inc.
3-31-75 Grove Key Marina, Inc.
3-31-76 : Grove Key Marina, _Inc.
Limelight Yacht Sales, Inc.
3-31-77 Limelight Yacht Sales, Inc.
12-31-77
East Coast Marina, Inc.
12-31-78 East Coast Marina, Inc.
Page 5 of 5
Grove Key Marina,Inc.
Summary of Brokerage Boat Sales, Commissions and City Rental
April-, 1, 1973 Through .January 31,..1979
1-31-79
Broker
ast Coast Marina, Inc.
Brokerage
Boat
Sales
Broker's
Commissions`
$ N/A $ 750.00
N/A4,141.75
N/A _ * 1,860.00
41,100.00 3,695.00
** 2,222.22 200.00
52,250.00 4,705.00
23,002.78 2,070.25
187,238 54 3,276.67
842,407.40 14,742.13
129,307.70 : ***1,293.08
50,894.50 ****1,000.00
$1,328,423.14 $ 37,733.88
**
N/A Not Available
* Includes abandoned boats sold for past due storage.
** Estimated
***,1% commission - on boat sales with small margin of profit.
****Minimum commission of$1,000.00 per month.
City Rental
10.3% of ` 4% State
Commissions Use Tax
Brokerage Boat Sales
79-475
EXHIBIT` A
Total PaymentsDifference`.
payable , ReceivedDue
77.25 $ 3.09 $ 80.34
426.60 17.07 443.67
191.58 7.66 199.24
380.59 15.22 395.81,
20.60 .82 21.42".
484.62 19.39 504.01
213.24 8.53 221.77
337.50 13.50 351.00
1,518.44 60.74 1,579.18
133.19 5.32 107.12
51
103.00 4.12
$ 3,886.61 $15_ $ 4,042.07
"SUPPORTIVE
DOCUMENTS
FOLLOW"
80.34
443.67
199.24
395.81
21.42
504.01
221.77
351.00
1,579.18
133.51
107.12
$4,042.07
-0-
-0-
_0_
en;
CITY OF' MIAMI, rLORIDA
INTER -OFFICE MEMORANDUM
1.° Howard V. Gar,y, Director DTE' April 9,1979 F9'.-475
Department of Director
and Budge
. Grove Ke,y Marina, Inc. for lie
'UtILICC1*** Boat Brokerage Operation att
Period-4/1/73 through 1/31/79
FROM: Sujan S,..4abr'a, ssistant Dj.rettor
Depaq,ill'ent/fofi Ma agernent.eand Budget for
Di vi si'on-Co____:_,Trtgr uZi t ENCLOSURES..
I. DESCRIPTION
• A. At the request of James E. Gunderson, Director, Finance
Department, we have audited the records of Grove Key
Marina, Inc. and the various boat brokers operating
from the premises leased to Grove Key t4arina, Inc. from
the commencement of the initial agreement on
April 1, 1973 through January 31, 1979, to obtain the
following information:
1. Boat sales generated from the boat brokerage
operations held on the premises of the Grove Key
Marina, Inc.
Commissions received by the brokers from the boat
sales.
Amount of rental payable to the City as well as
the rental paid, and any difference due to the
City. 1979.
This audit was completed on April 9,
I FINDINGS AND RECOI1MENDATIONS
A. FINDING #1
1. We were unable to obtain the following information
from the available records for the various
brokers' operations on the premises of the Grove.
Key Marina, Inc. during the audit period:
a. Everglades Marine, Inc. brokerage boat sales
for the period ended March 31, 1974.
. Grove Key Marina, Inc. brokerage boat sales
for the periods ended March 31, 1975 and
1976.
1) F Pc) r?T \IE
40
City of Miami, Division of Internal Audit
Department of Management and Budget
Howard V. Gary Page 2 of 5
Boat Brokerage Operation`
79-475
Limelight Yacht Sales, Inc. gross boat sales
for some transactions during the periods
ended f larch 31, 1976 °and 1977.
Commissions earned by the East Coast tiarine,
Inc. brokerage operation for the periods
ended March 31, 1978 and January 31, 1979.
The amounts of commissions paid by the, various
brokers toGrove Key Marina, . Inc. were known but
the amounts of gross boat, sales, on which the
commissions were based,, were not 'available with
the exception of the ;1976 sales of the Limelight
Yacht Sales, Inc.., For their. ";gross boat sales in.,
1976, the Limelight `':Yacht Sales, Inc. paida
commission of 9% to Grove •Key Marina, Inc. We
have been advised by Grove Key Marina, Inc. that
this arrangement was different from the other.,
brokerage operations ' in that Limelight Yacht
Sales, Inca did not pay rent for office space or
utilities.
We attempted to trace the cost and sale
prices of boats in the records of the East.
Coast tlarine, Inc. in order to determinethe
commissions earned.for. the audit period. We
found ' that, their records did not include an
individual file for each boat transaction and
the Sales and Purchases ,Journals included
other sales and purchases from ;transactions.
which had been made off the premises. Com-
pletion of a sales transaction may take three
to five months from the initial sales deposit
because of trade-in, sales, payment for
accessories, other charges and final payment.
Related disbursements by the broker were also
over. a periodof time. We could not deter-
mine which costs in ;the journal related to
the sales off the premises or which receipts
were. from .sales prior to moving on to this
facility. The present bookkeeper and manager
have been on the job for a short time only
and were not familiar with the past trans-
actions. However, the manager agreed to
maintain individual files for future sales.
From the records of the East. Coast Marine,
Inc., we were unable to determine the actual
,tfr
City of Miami, Division of Internal Audit
Department of Management and Budget
Howard V. Gary Page 3 of 5
Boat Brokerage Operation
79-475
°commission° generated by their operation on
the premises of the Grove Key Marina, Inc.
We were advised by East Coast Marine, Inc.
and Grove eaKeytly Marina, Inc. that commissions
between new and used boats, as
vdairdlethegexpenses related to the sale, and for
that reason East Coast Marine, Inc. was
paying Grove Key Marina, Inc. a fee 1.75% of
the gross sale on all boats (new andused)
during 1978.
B. FINDING #2 A summary of the boat sales, commissions,
City rental (at 10.3%) payable, and the amount paid and
due to the City is scheduled on Exhibit A. The audit
indicated that the 1.75% gross as a fee had been re-
ported accurately to Grove Key Marina, Inc. and that
Grove Key Marina, Inc. had accurately paid .the City
10.3% (plus the 4% State Use Tax) on all these reve-
nues. There is no difference due to the City.
FINDING #3 Other revenues received by the lessee from
the present broker, East Coast Marine, Inc., for the
period December 1977 through January 1979, and subject
to the City's rental percentage of 10.3% are listed
below:
•
Office Space Rental $ 2,704.00
Storage Space Rental 9,387.30
Total Rental Payments $12,091.30
City Rental @ 10.3% $ 1,245.41
This rental due to the City has been paid by Grove Key
Marina, Inc.
D. FINDING #4 - Commencing with January 1, 1979, the East
Coast Marina, Inc. has agreed to pay the lessee, Grove
Key Marina, Inc. a rental equal to one percent of the
boat sales or a thousand dollars per month, whichever
is the greater. Mr. Meredith informed the auditor that
this reduction of fee from 1.75% of gross sales to only
1% was agreed upon because financial records showed
that East Coast Marine, Inc. could not afford to con-
tinue to pay 1.75%, as well as rent for office space
and the storage of boats.
FINDING #5 - Previous annual audits of Grove Key Ma-
rina, Inc. show that it has always complied with the
terms of its Lease Agreements in regard to accurate
City of Miami, DiVision of internal Audit
Department, of Management and Budget
Howard V. Gary
Boat Brokerage Operation
79-475
Page 4. of 5
payment; of rental due the City,
and that all such
payments and reports have been made when due.
/c1
cc: J. Grassie
J. Gunderson
R. Jennings
File
Reader
TO:
FROM.
•
45
Joseph R. Grassie
City Manager
Ames-E.Gunderson
irector of Finance
IU •
V n
i'oni;ccr Sub lease Agreement; Grove Key Marina, Inc
and East Coast Marine, Inc.
In the. fall of 1978 the Lease Management Section of the City became aware that the
sale of new and used boatswas taking place at Grove Key Marina on an expanded;
basis compared to previous years and that these, sales were being handled by an
independent company,. East Coast Marine, Inc. An inquiry to Grove Key Marina
indicated that Grove Key had an Agreeflleflt with East Coast permitting them to be
the exclusive agent for the brokerage of used boats on, the premises and the
sale of certain makes of new boats. Grove Key presented correspondence between
the City Manager in May and June of 1973 which it had interpreted as granting.it
permission:; to allow outside companies to engage in the sale ofboats on the
premises and, to pay the City 10.3% of the revenues that Grove Key received from
such sales. The Lease Management Section felt that despite the terms of the
Agreement,with East Coast that this was a de facto Sublease and that it would
require the approval of the City Commission in accord with the Lease Agreement of
April 1, 1976 between the City and Grove Key Marina. Several discussions between
the City and Grove Key ensued with the result thatit was agreed to present the
Agreement between Grove Key Marina and East Coast Marine, Inc., to" the City
Commission for approval as a Sublease.
The next consideration was whether the City was receiving an equitable share of the
revenues generated by the sale of boats on the premises. Grove Key maintained that
the City was receiving its share in accord with the ;10.3%';:of.gross sales received by
Grove Key basing that upon the City Manager's letter of 1973 which had been the basis
for operations sincethen and which had been subjcctto annual audit by the
Citycwith-
out question. The City's;position is that the 1973 correspondence (copy of
is
attached) did notenvision an expanded brokerage operation as East Coast is conducting
at presentor an actual Sublease to East Coast which the City contends is now the
de facto situation.
An audit was undertaken by the City. on March.17th which indicated that Grove Key had
since April 1, 1973, always reported accurately; its revenues from the sale of boats
to the City and; paid the City. the 10.3%and the 4% sales and use tax that was due.
In addition, all of the brokerage operations hadbeenreported accurately to Grove
Key, as best as could be determinedby the existing records at this date.In the
case of East Coast Marinewhich started operations in January 1978, the commission
paid to Grove Key was based on a percentage of the gross sale ofthe boat rather than
on the actual "commission" earned by the, salesman since these commissions varied
widely between the sale of used boats and new boats and the costs_ of the sale
(advertising, financing,.splitsalesmen's commissions,etc.) were,bascd on the records,
available, impossible to determine.
"SUPPORTIVE
z DOCUMENTS
FOLLOW" 79- 340
East Coast is currently paying Grove Key for the storage of boats and for the
office space that it uses and the City is receiving 10.3% of those revenues.
The result of the audit was that revenues have been reported accurately since
April 1, 1973, to date and no additional payment is due the City.
Because the City Commission approval is required for this Sublease and because the
operation is considerably expanded beyond that originally contemplated by the City
Manager in 1973 with significantly greater revenues being made available to Grove
Key as a result of the Sublease, it is the staff's position that these revenues
should be divided equally between the City and Grove Key Marina as is the case in
the Sublease between Grove Key and the Ship's Store, i.e. instead of receiving
10.3% of the revenues that Grove Key Marina receives as at present, the City would
receive 50% of the revenues that Grove Key Marina receives.
The attached Sublease Agreement between Grove Key Marina and East Coast Marine
provides for Grove Key to receive 1% of the sale of boats sold on the premises by
East Coast as a fee for permitting East Coast to operate on the premises. In turn
Grove Key will pay one half of this 1% to the City as its share of the Sublease.
In addition, there is a minimum guarantee of $1,000 per month (cumulatively $12,000
per annum) which East Coast is required to pay, so that in effect the City is re-
ceiving a minimum of $6,000 per year as its share of this brokerage! pperation as
outlined in the attached Sublease Agreement..
JEG:WHH:bf
Attachrrtent,
"SUPPORTIVE
DOCUMENTS
FOLLOW"
79-340
AGREEMENT
THIS AGREEMENT, by and between GROVE KEY MARINA,
INC.,
Florida corporation, (hereinafter GROVE KEY), 3385 Pan American Drive,
Miami, Florida 33133, and EAST COAST MARINE, , a;Florida corporation,
Miami, Florida
1979.
INC.
(hereinafter EAST COAST), 2583 South Bayshore Drive
jCf) 33133, made this 2-2
CC l.a.J -:a
� 0 fight
(n Q —the base
v
day of.
WITNES
SETT is
1. SALE OF BOATS. GROVE KEY hereby grants to EAST COAST the
to locate at GROVE KEY's premises at Dinner Key,
of its operations for brokerage, sale of new
Miami, 'Florida,
and used boats
and such marine equipment which has been approved in writing by
GROVE KEY. Specifically excluded from this authorization is the right
to sell marine equipment or engine equipment that is currently being
sold or would normally be sold by the GROVE KEY repair service"
and/or
Ship's Store &
boat as part of an overall sales package.
2. BROKERAGE CONTRACTS. EAST COAST wil.1 use only those forms
es invoices and brokerage contracts which
by GROVE KEY.
Tackle Inc.
unless such equipment is included in
of consecutively numbered sal
have been approved in writing
the
3. FEE. In consideration of the rights granted herein EAST
COAST shall pay to GROVE KEY one percent (10%);of its gross sales of,
new and used boats and marine equipment regardless of whether same are
EAST COAST or brokered by EAST COAST. In addition there shall
owned by
of $1,000.00 per month on a cumulative basis
of the year, the total fee shall be a minimum of
be a' minimum guarantee
the third
month
by.
$3,
the Miami Consumer
000.00.
The minimum
minimum guarantee
month.
guarantee shall be adjusted
annually base
i.e.
upon
Price Index. Any difference between the fee and this
shall be paid monthly by`the 15th of the following
It is mutually agreed by EAST. COAST and GROVE KEY
consideration to the City of Miami for its approval of this
any revenues based onthe sale of new and used boats and marine
that as
Agreement
equipment (1% of gross or minimum guarantee) "which are"received by
GROVE KEY from EAST COAST shail be divided equally between GROVE KES
and the City of Miami and in turn included with the revenues, that
GROVE KEY pays to the City under the terms of its April 1, 1976
79-n40
Lease Agreement. In addition EAST COAST shall pay GROVE KEY the
Florida retail sales tax (currently 4%) on all such revenues received
and GROVE KEY shall forward this sales tax
by
GROVE KEY,
appropriate authority.
to the
Not included in the gross sales shall be any sale to a
licensed boat dealer within or without the United States provided,
however, that the invoice for such e:(eluded sale shall reflect
evidence that the purchaser is a'licensed boat dealer including but
not limited to the employer's identification number and/or Florida sales
tax certificate number of the purchaser. Also not included in gross
sales shall be taxes which are collected on behalf of a governmental
body which are separately stated on the contract or invoices and.
forwarded to such body. All equipment included with the sale of any
boat shall be included in.computation of gross sales. Fees due under
days after
this paragraph shall be paid monthl.y'within fifteen (15)
the end of the month in which the sale was completed. A sale
o be completed when payment in full has been received by
considered't
EAST COAST.
unless the
A deposit on a boat shall not: constitute a sale
deposit is retained by EAST COAST for any reason.
EAST COAST shall not-open`any other office for the business
contemplated herein within Dade County, Florida. The Agreement shall
to all boats and equipment sold by. EAST COAST's office in
County, whether stored` at GROVE KEY or elsewhere . In the event
EAST COAST maintains one or more offices outside Dade County,this
pertain
Dade
that
Agreement shall no,t apply
to such offices. Forthe purpose of.this
Agreement, the sale shall be considered to have been made in Dade
County if any of the following have occurred there: the buyer was
made adeposi.t on the boat, or entered into
the boat,
or sell
use a
and/o
at a
shown
a contract to buy
the boat.
4. OFFICE SPACE. GROVE KEY agrees to, permit EAST COAST to
portion `of its space on Dinner Key,' Miami, Florida, as an office
r work area for the activities described herein such space ;to be
place or places within the premises to be designated in the sole
discretiOfl of GROVE
be a monthly charge
KEY, which shall not be unreasonable. There shall
(including Florida retail salestax); to be
determined by GROVE KEY for the use of this space rcasonably`related t
-2-
the value of comparable space used for the storage of boats in that
area.
approved in writing
Any improvements to the realty by EAST COAST shall first be
GROVE KEY and shall be paid for entirely by
by
EAST COAST, and become part of
the realty owned by the City, upon
completion of ;construction.
5. HOLD HARMLESS. EAST COAST will indemnify and hold harmless
KEY and the City of Miami for any action arising fromthe activities
including, but not limited to,
GROVE
of
attorney
EAST COAST
or its
employees or agents,
fees and costs incurred in the defense of any claim or
including, without limitation any damage or injury caused during the
demonstration of a boat or against any product sold by EAST COST.
EAST COAST will provide appropriate pubaic liability insurance with
KEY and the City of Miami named as co-insured with minimum limits
in the t f One Hundred Thousand Dollars($100,000) per person,
GROVE
amoun o
Three HundredThousand Dollars
Dollars ($50,000) property damage.
KEY to be provided with a memorandum o
($300,000) per incident, Fifty Thousand
EAST COAST shall.. arrange for GROVE
the insuror and
agreement by the insuror to provide
event of<cancellation of the insurance
6 REPAIRS; SALE OF HARDWARE.
any repairs or sale of hardware except under the
A. Dealer preparation of new boats
coverage from
"SUPPOR !,
DfC'i�IAA- '
I
ten (10) days notification in the
policy.
demand,
EAST COAST. shallnot conduct
following
or sale.
conditions:
ram-' B. Warranty work on boats sold by EAST COAST.
C. Repairs to boats owned by EAST COAST.
STORAGERAT ES. .
EAST COAST shall pay the standard rates for
1
OL L O �� VJ
storage and hauling,
storage rates,.
and all boats listed for sale will pay the regular
.e.` no discounts will be given
sales consignment basis
and be liable
before the boat
must be authorized
o boats stored on a
All boat owners must sign a storage contract
for their storage bills, which must be paid in full
can leave the yard. to be done by. GROVE KEY`.
in writing by the owner on a standard GROVE KEY'work
order form. EAST COAST shall
authorizes GROVE KEY to do.
Repair work
be liable for any repair work that it
Boatscan be put in the water by EAST COAST
for sales demonstration or sea trial
permission or by presentation` of
by an agent of EAST COAST, who
the
purposes with the owner's written
when accompanie
boat's registration
shall be
responsible for the payment
0
-3-
tP79-3 46Cf)`11
•4'1. Ve0
any bills due GROVE KEY in the event that the boat does not return to
the marina.
8. AUDIT. The financial records of EAST COAST shall be
subject to audit at any reasonable time by GROVE KEY or the City of
Miami. The books and financial records shall be kept on the premises.
9. EXISTING LEASE. EAST COAST is aware of the terms and
conditions of the Lease between GROVE KEY and the City of Miami, as
amended to date. EAST COAST agrees not to take any action which would
cause a default of any of the terms of that lease, and any such action
taken by EAST COAST shall be sufficient reason for GROVE KEY to terminate
this Agreement. In the event that the Lease between GROVE KEY and the
City is terminated, then this Agreement between GROVE KEY and EAST COAST
shall be automatically terminated, and neither party hereto shall have
cause of action against the other as a result of such termination, unless
such termination resulted from the actions of EAST COAST,
10. LICENSES. EAST COAST shall obtain all necessary Federal,
State and local licenses and shall Post any and all bonds which are
required to conduct the
businesscontemplated by this Agreement. EAST
COAST shall be responsible for its own employees and shall be responsible
forall Federal, State and local.
taxes, including any ad valorem taxes
rt
'ning to its operations and the area which it occupies, and for
all
insurance requirements on all of its agents or erniploYees including
but not
end State une p taxes.GOn demand EAST COAST shall supply ROVE
limiteindiotoymwenortkmen's compensatio.ns insurance,parag2aF.I.C.A., phFederal
KEY with evidence of compliance with this
11. SECURITY DEPOSIT. EAST COAST will deposit Five Hundred
Dollars ($500) with GROVE KEY as security for the performance of and
Agreement and the payment of all fees due or which may come due,
said deposit shall be refundable at the termination of this Agreement
11 conditions contained herein have been met.
if a 12. SIMILAR RIGHTS. GROVE KEY agrees not to enter intoa similar
agreement with any other person or entity for the duration of this
Agreement, for the sale of new and used boats from GROVE KEY's present
premises on Dinner Key, Miami, Florida. i
IFICA1I0 . N This . constitutes Agreem..,...
13. ENTIRE AGREEMENT; MOD ent
the entire agreement between the parties and supersedes any other oral or
-4-
March 1, 1978. This Agreement may not be amended
signed by the party to be charged.
., UTILITIES.
office and work area in
15 TERM.
shall
renewed for
a clean and safe
This Agreement shall
remain in effect for a period of one year,
one-year terms unless
suuccessive
n thirt - (30) ` days
be terminate y
may d b either party hereto upo y
notice, at any time, or by GROVE KEY in the event
manner provided, in Paragraph 18 below.
16. ASSIGNMENT. This Agreement
of a default
Agreement
written.
in ° the
or any of the rights, duties.
ned by EAST COAST and' any
or obligations created herein may not be assi g
such assignment shall automatically void this contract.
ime during the period of
17.
written understandings, including the Agreement between, the parties dated
except in writing
14 EAST COAST shall be responsible for its
telephone and for the cost of its electrici:ty, which shall be separately
P
metered. EAST. COAST shall further be responsible for putting its waste
in a container to be provided by GROVEKEY and for maintaining its
manner.
be effective June 1, 1979 and
and shall be automatically
terminated. This
VOTING CONTROL. If at any
Agreement the persons who presently own a majority, of the shares of
EAST COAST: MARINE,' INC. sell: or transfer such shares or create a voting
trust, f a� third person,
in favor o
terminated.
this
this Agreement shall be automatically
At the time of execution of this Agreement, EAST COAST �� f`
SUP ORTI--
e GROVE KEY with the names and addresses of all its .
DOCUI EN i
shall ::provid
stockholders, directors and officers. �PJ4
18. DEFAULT.': In the event of a default by EAST COAST
of the provisions of this Agreement, GROVE KEY shall inform EAST COAST
in writing of said default, ,following .of;whi.ch EAST COAST shall have
fifteen (15) days in which to correct said default. In the event that
said default has not been corrected to GROVE KEY's satisfaction within
that time, GROVE KEY may notify EAST COAST that this
cancelled allow EAST COAST thirty (30) days in which to vacate its
premises and pay any monies to GROVE KEY which may be due.
r
AND REGULATIONS It is GROVE
an d
19. ANCILLARY ACTIVITY;
KEY's intention
namely the sale of new and used boats
operation of the
RULES
in entering into this Agreement
Agreement has been
pro,'ide an activit
and equipment, which
OW"
is incidental
marina. The activities of EAST COAST
to the overall
may not be conducted in such a manner as to interfere with the basic
79-340
public purpose of the marina which is the dry storage of boats up to
and including twenty-eight (28) feet in length, as well as their
launching and hauling. GROVE'KEY reserves .the right'to.establish rules
and regulations governing. EAST COAST's activities so that those activities
do not interfere with the activities of GROVE KEY or its sublessees or
customers. In the event that EAST COAST does
regulations or conducts its business in a manner to cause damage to
GROVE KEY, its operation or reputation; then GROVE KEY shall first advise
not comply
with said rules an
EAST COAST of default, and if not corrected within fifteen
days,
GROVE KEY may, at its sole option, terminate this Agreement. Examples
of such rules and regulations would be hours of operation, area of boat
display, hours oflaunching or hauling boats, use of forklift trucks,
security, advertising and signs, public disorder. GROVE KEY further
reserves the right to immediately terminate any activity by EAST COAST
not specifically enumerated herein which takes place on the premises at
Dinner Key if, in GROVE KEY's sole discretion, such activity may cause
damage to GROVE KEY's operation, business
20. SURRENDER OF PREMISES. Upon termination of this Agreement
EAST COAST agrees to promptly and peacefully surrender that portion
of the premises which it is then occupying in good condition, ordinary
wear and tear excepted. Payment shall be made to GROVE'KEY of any
amount then due'and'owing after which all boats and equipment belonging
to EAST COAST shall be promptly removed.
21. ATTORNEYS
the parties
the prevailing party shall be entitled to reasonable attorneys' fees.
litigation between
to enforce any of the terms or provisions of this Agreement,
-6-
22. NOTICES. Any notice required by this Agreement shall be
deemed sufficient if made in writing and mailed, certifies mail -return
receipt requested to the parties at the address set forth at the
beginning of this Agreement, or by hand delive.:y to any officer or
director of GROVE KEY or EAST COAST.
IN WITNESS WHEREOF, the parties have hereunto set their hands and
seals on the day and year fir
GROVE `;KEY MARINA,
By :
EAS 0 T MARINE,
enesioacr By :
(Corporate Seal) (Corporate Seal)
.
s�1
-7 -
ri.79- 3 4 0
eitu of
OFFICE OF THE CITY MANAGER
►{i un i,
N 11973
Mr. Spencer B. Meredith
President
Grove Key Marina, 'Incorporated
3385 Pan 'American; Drive
Miami, Florida 33133
Dear Mr. Meredith:
This will acknowledge your letters of May 25 26, and 29, 1973,
concerning your lease agreement with the .City. of Miami. This
letter will respond to your individual letters by date.
May -2
,
1973.Letter
3500 Pun Am.rican Drive
P. O.'Boa 708
MIAMI, FLORIDA 33133
The City of. Miarni interposes no objection to Grove Key Marina
undertaking the maintenance work defined in your: May; 25, , 1973
letter. In accordance with your lease, all repairs and alterations
are accomplished at the expense of Grove Key Marina.`.
May 26, 1973 Letter
As prescribed by your lease. this `letter will serve as authorization
for.you. to proceed with the improvements identified in your.: May 26,
1973 letter. Specifically, you are authorized to: ' 1) Enclose and
air condition the southwest corner of 'I-langar A to accornrnodate a
retail boat supply and hardware sales facility, ' iiccupying approxi-
mately 2, 500>square feet; 2) Enclose'approximately 225 square
feet: of the,northw'st corner of Hanger A to provide office space; and
3) 'Install storage racks to accommodate approximately 300 boats.
.t•. Spencer B,�' creclilh
Grove Key Marisa
Prior to commenting on your request to fence the back lot of Hangars
A and B'(west side), and to replace the existing "Cap'n Dick's Tackle
Shack!' with a C13S building on the existing concrete apron, and to
replace the existing;dockrnaster's shack with a CBS building, it will
be necessary for you to submit construction plans concurrently to the
Building Department and the City Manager. After the I3uilding Depart-
ment has approved your plans and specifications, the City will be in a
better position to evaluate your proposal.
The Building Department will issue a permit following the approval
of the City Manager.
It was intended that the small boat marine waterfront facility at Dinner
Key would encompass the retail sale of. boats 28 feet in length or less.
Accordingly, paragraph 5 of your lease specifically defines gross
sales (as gross receipts) "to include all monies paid or payable to the
company arising out of or in connection with the company's use of the
leased premises whether or not collected, including but not limited
to any and all sales made on said premises." Therefore, as described
in your May 29, 1973 le,tter, should Grove Key Marina provide a brokerage
or sell a boat as a service and receive a lee for providing sucha service,
the City is entitled to 10. 3°A) of the fee or. sales commission received.
Should Grove Key Marina desire to accept the storage of boats for the
purpose of offering the boat for retail sale, and assuming Grove Key
Marina does riot take title to theboat, then the City is entitled to its
consideration fo: the regular monthly storage charge policy City portion
of the' consideration provided Grove Key Marina at the time of sale.
It is specifically understood that Grove Key Marina will control boat
sales, and will not permit free use of the leased premises for the`sale'
of boats.
V
Your proposal also requested permission to place a small office
trailer in the parking area immediately to the south of Hangar A.
This cannot be granted, as theuse of a trailer as an officeconflicts
with the City's zoning regulations.
I trust this satisfactorily're.sponds to your requests.
of 2
" .. M1. ta'
a. ,
'-�--GROVE KEY MARINA INC
�33135 PAN ANICRICAN DRIVl., OINNL" ft I.LY, MIAh11, FLORIDA 331 33
OFFICE: 1305) 440.8 20 DOCKMASTCR. (305) 448.9134. CABLE: OCEA:: E i
Mr. Melvin Reese;
City Manager
3500, Pan American Drive
Miami, Florida
0ne of the: areas nor specifically defined in our Lease Agreement
with the City of Miami pertains to the sale" of new and used boats where 'the
owner is not Grove Key Marina, but where Grove 'l:ey'Mfarina can act as a broker
or salesman in b.! .ilf of the ownE.r and. receive IL commissi.on"of a percentage
or a flat fee for services` regarding the sale.
The sale of new and used boats is an essential'' ingredientn any
large marina, and in fact it is unavoidable, since it is ; impossible to prevent
an -owner from selling his ;boat while it is in storage. As we get mor•c_boats
in the yard, we will have ,more boats` that are for sale.'
As it is now, no income is: received by Grove Key Marina, or by the
City (except for customary: storage charges) " when 'a sale takes place. We have
had ►„nny inquiries abaut boats for sale from potential buyers; and it 'Appears
that anadditional and substantial source of income couid be generated by
pursuing this.
It is our interpretation of our Lease Agrccment` that any income
received by Crovc Key' Mariain return for 'special services regarding the sale
of a boat ;not; owned by;the : company be treated ,as, gross . income on which the
10.37. lease payment is to be nude. Thus,`` whether the commission was paid on
the basis of a percentage of the selling price, cg. ` 67., or whether it was paid
ne "n._flat fee, ' eg. " $200.00, it is this _amount: that would be considered as gross
income to Grove Key Marin r, and not the actual selling price of the boat to the
buyer;
This is clearly, the prapmatic approach since it is impossible for us
to legally prevent_ an owner from selling: his boat, -either on his own or through
a "broker, :and it isleg,ally impossible for "us. -to collect 10.37. of .the :selling
;price ;of the boat on 'behalf
of ; the 'City when the boat "my be sold at a loss
(or at n profit) and .when the connnission to: the 1►rol:er or saleslran is less than
that amount. 11 nce, ;the hest solution for the; City i+; .for Grove Key Marina to
try to obtain the" exclusive Listing for sale of any boats. in- the yard t`.iat are
for, sale,•: and to obtain what income can" be derivcd -from the sale in the form of
a commission, paid either as a -fee or -as a.perccntag;c"of`.the.sale price. The
gross amount eo:rccc"ivcdby,Cruvc:Kcy Mnrina will .he reported' as such and the
10.37. lease pnyment•wi11'be paid on;.thtt'amount.
There are several used boats now in the yardthat will
co:,.m=rce this business.
enable us to
GIUDVC KEY HARM, J (conL iiiucd)
Also relative to this, we recently received n proposal from Everglades
Marina in tort Lauderdale regarding the sale of Nova -boats. Novas are a well mad
and popular boat in this area, .and rvercladea has had 'exce':lent. success in sellir
then in the tort" Lauderdale. nice. They requested that they be permitted to ;gut
5 or 6 boats en display in thu, parking circle encompassed by the austrati:.n pine
hakes in front of the smith entrance to Naanger A, along with a small (8::15')
office,trailer. They would. pay the regular monthly storage rate fer these boats
($72.00 plus tax) plus an additional $250.00 per boat when it is cold. We would
have the opportunity to sell and tn::tal1 whatever marine accessories are involved
as well as a good chance that the now owner will 'keep the boat in our yard. We
feel,"thatthis in a sound Proposition with many ancillary benefits and that we
should accept it, since `it is a new andprohably substn,:tial source of income.
Tho10.3Z, of the $250.00 display fee, as well as the ctorrgc
incoma and, sate of accessories us is customary.
,Since this is a matter on which we should reach"a'decision quickly,
.wo;will,ac^ucne that our interpretation of the Lease Agreement is correct. If
the Cityis not in agreement with this or does not wish us to enter into the
above agreement with Everglades Marina, then please ndvise`us within`.;, ten, days
' f rot this date. If we ;have not heard to the contrary' by then, we -shall consider
that the City is in agreement with us in this rnittcr and we shall proceed on
the ba in 'outlined above.
' SBMcr
rit)•
Spencer B. Meredith
President`