HomeMy WebLinkAboutSummary FormAGENDA ITEM SUMMARY FORM
. Y FILE ID: Oci -61 31 SP.2
r.j
Date: 12/10/2009 Requesting Department: Public Facilities/Asset Management
Commission Meeting Date: 12/17/2009 District Impacted: 2 Law Department
Type: ® Resolution ❑ Ordinance ❑ Emergency Ordinance ❑ Discussion Item Matter ID No.
❑ Other A-040190
Subject: Flagstone Island Gardens, LLC. at Watson Island
Purpose of Item:
A RESOLUTION OF THE MIAMI CITY COMMISSION AUTHORIZING AND DIRECTING THE CITY
MANAGER AND THE CITY ATTORNEY TO TAKE ALL NECESSARY AND APPROPRIATE
ACTIONS IN ORDER (1) TO REQUEST THE ESCROWED FUNDS TO BE PAID PROMPTLY TO
THE CITY UNDER THE ESCROW AGREEMENT, DATED SEPTEMBER 27, 2005 ("ESCROW
AGREEMENT") WITH FLAGSTONE ISLAND GARDENS, LLC, A DELAWARE LIMITED LIABILITY
COMPANY, AS SUCCESSOR BY MERGER TO FLAGSTONE PROPERTIES LLC, AS
DEVELOPER (COLLECTIVELY, "FLAGSTONE") AND SHUTTS & BOWEN, LLP ("ESCROW
AGENT'), (2) TO TERMINATE THE AGREEMENT TO ENTER INTO GROUND LEASE, DATED
JANUARY 1, 2003, INCLUDING ALL EXHIBITS AND AGREEMENTS ATTACHED THERETO, AS
SUBSEQUENTLY AMENDED (COLLECTIVELY, THE "AGREEMENT TO ENTER") WITH
FLAGSTONE FOR THE MEGA YACHT MARINA AND MIXED USE WATERFRONT
DEVELOPMENT PROJECT ON WATSON ISLAND (THE "PROJECT"), (3) TO TERMINATE AS
NECESSARY ALL EASEMENTS GRANTED TO FLAGSTONE AND ALL OTHER AGREEMENTS
WITH FLAGSTONE, (4) TO RETURN TO AND OBTAIN FOR THE CITY, ALL RIGHTS IN THE
PROJECT, THE PROPERTY, THE ESCROWED FUNDS, AND THE RELATED PERMITS,
GOVERNMENTAL APPROVALS, DOCUMENTS, INSTRUMENTS AND AGREEMENTS, AND (5)
TO PROTECT THE CITY'S INTERESTS AND RIGHTS IN THE PROPERTY AND THE PROJECT,
Background Information:
See Supplemental Sheet
Budget Impact Analysis
NO Is this item related to revenue?
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:
Final Annrovals
SIGN AND DATE
CIP N/A Budget N/A
If using or receiving capital funds
Grants N/A Risk Management N/
Purchasi N/A Dept. Director
Chief City Manager
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Subject: Flagstone Island Gardens, LLC. at Watson Island
Background Information:
The City of Miami ("City") is the owner of certain real property located on Watson Island,
Miami, Florida (the "Property"). Pursuant to the processes for the City's Mega Yacht Marina
and Mixed Use Waterfront Development Request for Proposal and all addenda thereto
(collectively, the "RFP") issued February, 2001, for development on the Property of a mega
yacht marina and related and other upland facilities (the "Project") Flagstone Properties, LLC'
submitted a proposal and was selected as the most qualified responsive and responsible
bidder. On November 6, 2001 (the "Referendum") the voters returned an affirmative vote for
Flagstone Properties LLC which subsequently merged with Flagstone Island Gardens, LLC,
a Delaware limited liability company (collectively, "Flagstone").
Pursuant to City Commission Resolution No. 02-1304, adopted on December 12, 2002, the
City and Flagstone entered into an Agreement to Enter Into Ground Lease, dated January 1,
2003 (which agreement as subsequently amended including all exhibits and attachments'
thereto including the form of proposed Ground Lease (the "Ground Lease") is referred to
collectively hereinafter as the "Agreement to Enter"). The Agreement to Enter has certain
conditions that must be met prior to the execution of the Ground Lease with Flagstone,
including depositing security deposits of five hundred thousand dollars ($500,000) as
escrowed funds (the "Escrowed Funds") pursuant to the Escrow Agreement, dated
September 27, 2005 (the "Escrow Agreement") by and among the City, Flagstone, and
Shutts & Bowen, LLP as escrow agent (the "Escrow Agent").
The Agreement to Enter has been amended by that certain First Amendment to the
Agreement to Enter Into Ground Lease and Amendment to Form of Ground Lease dated
December 12, 2004 (the "First Amendment To Agreement To Enter"), that certain Second
Amendment to Enter Into Ground Lease dated December 8, 2006 (the "Second Amendment
to Agreement to Enter"), that certain Third Amendment to the Agreement to Enter Into
Ground Lease and Amendment to Form of Ground Lease dated July 30, 2008 (the "Third
Amendment to Agreement to Enter") which requires Flagstone to discharge or transfer to
bond any and all liens filed upon the Property, or any part thereof, within forty-five (45) days
after notice of the filing thereof. Liens have been filed upon the Property in the approximate
amount of two million, one hundred and thirty-seven thousand dollars ($2,137,000), which
liens have not been discharged or bonded by Flagstone, despite repeated notices and
demands given by the City in accordance with the Agreement to Enter.
Pursuant to the Third Amendment and in consideration for the City extending the Lease
Deadline to February 1, 2010, Flagstone agreed to pay to the City beginning August 1, 2009,
the monthly sum of eighty-three thousand dollars ($83,000). To date, Flagstone has not
paid the City for August, September, October, November, and December payments totaling
four hundred and fifteen thousand dollars ($415,000).
Flagstone's lack of performance, continued failures to discharge or transfer to bond the liens
against the Property, and continued defaults in payments to the City, it is in the best interest
of the City to take all necessary and appropriate actions in order (1) to request the Escrowed
Funds to be paid promptly to the City under the Escrow Agreement, (2) to terminate the
Agreement to Enter, (3) to terminate as necessary all easements granted to Flagstone and
all other agreements with Flagstone, (4) to return to and obtain for the City, all rights in the
Project, the Property, and the related permits, governmental approvals, documents,
instruments and agreements, and (5) to protect the City's interests and rights in the Property
and the Project.
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