HomeMy WebLinkAboutcover memoCITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
f/c- -19
05')
TO :
FROM :
Honorable Mayo' _& Members of/tl June 28, 2004
DATE : FILE
ty Commiss' n
e Arriola
ity Manager
SUBJECT : 2003 Grand Prix Americas: Settlement
& Release Agreement
REFERENCES:
ENCLOSURES:
RECOMMENDATION:
It is respectfully recommended that the City Commission adopt the attached resolution authorizing the City
Manager to execute a settlement and release agreement with Raceworks, LLC for its outstanding financial
obligations to the City of Miami in connection with the 2003 Grand Prix Americas. Pursuant to the terms of
the agreement, the City will receive $53,444.22 for the outstanding obligations totaling $104,401.05.
BACKGROUND:
On May 22, 2002, the City of Miami ("City"), the Bayfront Park Management 'Trust ("Trust"), and
Raceworks, LLC ("Raceworks") executed a Revocable License Agreement ("Agreement") to conduct motor
vehicle racing events in Downtown Miami. Raceworks, at the end of each Event Weekend, is required to
remit to the City its Use Fee, Ticket Fee, and payment for costs of the improvements pursuant to the
Revocable License Agreement.
In September, Raceworks was granted a Motor Sports Racing Permit for the weekend of September 26thi —
28th, 2003. Following the Event Weekend, Raceworks was required to remit to the City a total of
$104,401.05. The amount outstanding consists of the following:
• City Use .Fee
• City Ticket Fee
• Damage to the Race Perimeter
$21,100.00
$10,5 54.00
$72,747.05
Shortly following the 2003 Event Weekend, reports were widely circulated that Raceworks, LLC and
Championship Auto Racing Team (CART) would be seeking bankruptcy protection from creditors due to
losses sustained as a result of the 2003 Grand Prix Americas and other series events. In order to mitigate the
City's potential exposure, the administration exercised the City's right to draw upon a Letter of Credit secured
prior to the Event Weekend. The draw totaled $47,790, the proceeds of which were utilized for: the pressure
cleaning of the baywalk, promenade, and sidewalks at Bayfront Park; debris removal; replacement of damaged
Light poles; and the replacement of palm trees along Biscayne Boulevard.
Pursuant to Section 57 of the Agreement —Restoration of Public Property — at the end of each Use Period and/or
upon termination of the Agreement, Raceworks' is responsible for the restoration of public property,
personal property, and fixtures of the City or Trust to the same condition which it was in prior to its use by
the Licensee. Shortly following the completion of the Event Weekend on September 28th, the City identified
an additional $72,747.05 of damage to the Race Perimeter. The needed improvements consist of the
following: replacement/improvements of curbing, gutters, and sidewalks; reinstallation of Burle-Marx pavers;
pavement restoration; replacement of bollards; and landscaping.
Earlier this year, Raceworks approached the City, the Trust, and Miami Parking Authority with a work-out
offer of 40 cents on the dollar to satisfy their outstanding financial obligations. Following some negotiation,
Raceworks agreed to the following settlement offer:
■ Raceworks agreed to forfeit it claim to a payment to the City of $19,473.00 for police and fire
surcharges which were mistakenly assessed.
• Payment of $.60 on the dollar for the balance of $84,928.05 or a payment of $50,956.83.
■ Payment conditioned on securing a waiver from the Miami Parking Authority and Trust releasing
Raceworks of its obligation to pay more than the agreed upon $.40 on the dollar pursuant to its
agreement with both entities.
The City successfully secured the needed waiver from the Miami Parking Authority, but our request before
the Trust's Board of Directors died for lack of a second.
Following our failure to secure the Trust's support, the City agreed to the Licensee's initial offer of $.40 on
the dollar. The terms of the settlement offer are outlined in an attached letter (Exibit "A") and also reflected
in the copy of the Compromise, Settlement, and Release Agreement (Exhibit "B") executed by Raceworks
provided herein. Pursuant to this settlement agreement the City will:
■ Retain the $19,473.00 in police and fire surcharges erroneously charged to Raceworks.
" Payment of $.40 on the dollar for the balance of $84,928.05 or $33,971.22 for the balance of the
outstanding financial obligations.
" Total compensation of $53,444.22 — approximately 51% of the total financial obligations
outstanding.
Attached please also find an e-mail forwarded to the Office of the Auditor General (Exhibit "C") regarding
the total number of tickets bartered/sold by the Licensee during the 2003 Grand Prix Americas. The Auditor
General has questioned whether Raceworks should be required to remit an additional $4,794 in Ticket Fees
for tickets issued to Motorock as part of its sponsorship arrangement and listed in the "Phone TIX" column
of the Ticket Master Final Settlement Report. As per the attached correspondence, the administration agrees
with the Auditor General's findings, but has chosen to forgo our claim given that we had previously agreed to
settlement terms with the Licensee.
We would ask for your favorable consideration and support for this proposed settlement agreement.
JA/A S