HomeMy WebLinkAboutSummary FormAGENDA ITEM SUMMARY FORM
;, Law Department
� ; FILE ID • 2 S9 Matter ID No.
Itz
Date: 4/14/2009 Requesting Department: Public Facilities/Asset Mgmt• L
Commission Meeting Date: 4/23/2009 District Impacted: 2
Type: ® Resolution ❑ Ordinance ❑ Emergency Ordinance ❑ Discussion Item
❑ Other
Subject: Resolution grantiniz a Fourth Amendment to the Agreement to Enter Into Ground Lease and
the Ground Lease for the Flagstone Island Gardens development.
Purpose of Item:
The Administration recommends that the Miami City Commission adopt the attached Resolution
authorizing the City Manager to execute the Fourth Amendment ("Fourth Amendment"), in
substantially the attached form, to the Agreement to Enter Into Ground Lease ("Agreement to Enter"),
and to the Ground Lease ("Ground Lease"), between the City of Miami ("City") and Flagstone Island
Gardens, LLC., ("Flagstone"), with the terms and conditions as more particularly set forth in said
fourth amendment; further authorizing the City Manager after consultation with the City Attorney to
negotiate and to execute such future non -substantive amendments to the Agreement to Enter and to
the Ground Lease, as may be necessary.
Background Information:
See Supplemental Sheet
Budget Impact Analysis
YES Is this item related to revenue? 00001.162000.449000.0000.00000
NO. Is this item an expenditure? If so, please identify funding source below.
General Account No:
Special Revenue Account No:
CIP Project No:
NO Is this item funded by Homeland Defense/Neighborhood Improvement Bonds?
Start Up Capital Cost:
Maintenance Cost:
Total Fiscal Impact: $333,332
Final Approvals
(SIGN AND DATE)
CIP N/A Budget
If using or receivin capital funds
Grants MrA Risk
Purcha ' N/A Dept.
Chief City
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SUPPLEMENTAL SHEET
Subject: Resolution granting a Fourth Amendment to the Agreement to Enter Into Ground Lease and
the Ground Lease for the Flagstone Island Gardens development.
Background Information:
The City and Flagstone entered into an Agreement to Enter into a Ground Lease (the "Agreement to
Enter") on January 1, 2003 consistent with all material aspects of the Watson Island RFP and the
Island Gardens Proposal and setting forth the conditions for the future execution of a long-term
ground lease ("Lease") with Flagstone Island Gardens.
The City and Flagstone entered into the Third Amendment to Agreement to Enter Into Ground Lease
and Amendment to Form of Ground Lease on July 30, 2008 which provided for various milestone
dates as well as a consideration for use of City -owned property. Flagstone has been making payments
to the City in a timely manner and has been diligently working towards finalizing their financing.
Due to the collapse of the financial market and downturn in the real estate market, Flagstone has
experienced delays in obtaining their full financing of the project. Flagstone's equity partner is
working with Flagstone to obtain all required financing. Flagstone is ready to commence construction
on the mega -yacht marina component at this time; however, Flagstone's equity partner and their
lender are requiring certain modifications to the agreements. Flagstone and the City have negotiated
the attached Fourth Amendment to the Agreement to Enter (the "Fourth Amendment") to provide
some assurances to the lending institutions while also allowing Flagstone to pursue construction of the
project. This Amendment will provide for, in addition to the one million ($1,000,000) a year
Construction Rent, an additional pro -rated phased development rent ("Phased Development Rent") on
a component by component basis upon completion of each Major Component. In addition, the City
and Flagstone have agreed that upon execution of the Lease, those provisions found in the Agreement
to Enter that need to continue to be in effect, shall be incorporated into the Lease as a new Exhibit'
"U" and those remaining provisions in the Agreement to Enter that do not survive shall automatically
terminate.
The Fourth Amendment would provide for the following: (1) Flagstone meeting all of the referenced
conditions precedent on a component by component basis; (2) amending the Construction Period from
thirty-six (36) months to sixty (60) months to accommodate construction on a component by
component basis; (3) Flagstone shall commence paying the pro -rated Phased Development Rent on a
component by component basis upon completion of each Major Component in addition to the one
million ($1,000,000) a year Construction Rent payments; (4) amending certain milestone dates in the
timelines for construction commencement and other development matters; and (5) providing for
Security Deposit(s) on a component by component basis, with terms and conditions as more
particularly set forth in said Fourth Amendment. The Amendment will also allow the City Manager
to negotiate and to execute such further amendments to the Agreement to Enter and to the Ground
Lease, provided that such amendments are not substantial, and are in accordance with the RFP and all
addenda, in accordance with the Referendum, would result in no revenue reduction to the City, and
would not length the construction period past the sixty (60) month period, as may be necessary from
time to time to accomplish construction on a component by component basis.
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