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HomeMy WebLinkAboutAgreement1 A binding agreement will provide a firm commitment from all parties to expeditiously move the project forward, in order to complete the Stadium in time for the 2011 baseball season. It will also allow the City, County and Team to proceed with the negotiation and development of the definitive stadium agreements referenced in the BSA, including the Non -Relocation agreement, Assurance Agreement, Management Agreement and the Construction Administration Agreement. All of these agreements will come back to this Commission for their consideration before July 1, 2008. BASEBALL STADIUM CONSTRUCTION BUDGET The Stadium construction is estimated to be approximately $515 million, a slight increase compared to the $490 million anticipated for the proposed Downtown site. The increase in cost can be attributed to the accelerated timeline needed to have a stadium ready for its first season in mid-2011. This assumes an aggressive 29-month construction schedule period with a November 2008 estimated construction start date. Table 1— Funding Contributions Toward Stadium Development Source County City Team Total Team Funding* $155,000,000 $155,000,000 County Funding** $347,000,000 $347,000,000 City Funding* ** $13,000,000 $13,000,000 Total $347,000,000 $13,000,000 $155,000,000 $515,000,000 *$35 million of the $155 million Team Funding Contribution is funded through annual rent payments of approximately $2.3 million to the County through the term of the Management Agreement **County funding includes $50 million of General Obligation Bond (GOB) proceeds approved via R-1371-07 and $297 million of bed tax revenues as described in this memorandum. The $50 million of GOB proceeds were previously allocated to the Orange Bowl renovation contemplated for the University of Miami. The County will also issue $35 million of debt to be paid from Team Rent payments. ***City funding does not include $10 million for Orange Bowl demolition and site preparation that is outside the stadium construction budget. It also does not include the value of land provided for the baseball stadium and an estimated $94 million for 6000 on -site garage and surface parking spaces The City's contribution to the stadium construction budget is $13 million. The City will also contribute the land (estimated at approximately 13 acres of the Orange Bowl site for the new ballpark) and pay for all costs associated with the demolition and disposal of the existing Orange Bowl stadium ($10 million). The City is also funding and constructing 6000 on -site parking spaces at an estimated cost of $94 million. Table 2 is provided below to reconcile the City funding amounts in the initial draft BSA to the proposed BSA: Table 2 — Reconciliation of Citv's Funding Contribution for Stadium Development* Funding Source Previous BSA Current BSA Difference TDT ** $48,000,000 $ 0 ($48,000,000) CDT ($10 million remains for demolition) $60,000,000 $10,000,000 ($50,000,000) CDT (City contribution to stadium construction) $13,000,000 $13,000,000 $0 Total $121,000,000 523,000,000 ($98,000,000) *Excludes $94 million for 6,000 on -site parking spaces and land conveyance. **City's share being bonded by the County. 2 The County's contribution to the stadium totals $347 million. This funding consists of $297 million of County tourist tax revenues and $50 million of Building Better Communities General Obligation Bond funds. The tourist tax funding includes $60 million of funding from the CDT, $88 million of funding from the TDT, and $149 million of funding from the PST. The Team's contribution to the stadium remains at $155 million. The draft BSA stated that the Team would privately finance the full $155 million. During recent negotiations it was agreed that the Team would shift to a hybrid financing structure whereby the Team would privately finance $120 million of the stadium construction costs and make annual rent payments to the County, upon stadium completion, of $2.3 million per year. Based on current interest rates, estimated issuance costs, and estimated capitalized interest, this equates to a net present value of approximately $35 million, bringing the Team's stadium construction funding contribution to $155 million. In exchange for allowing the Team to switch to the hybrid financing structure, the Team agreed to make annual payments of $750,000 into the stadium Capital Reserve Fund that will total $26.25 million through the 35- year term of the Management Agreement. Adequately funding the Capital Reserve Fund is a critical element in protecting the County's ownership interest in the stadium in future years. It should be noted that in other recent baseball stadium agreements between MLB teams and government entities in Pittsburgh, Washington D.C., and Cincinnati, the government entity was fully responsible for funding similar Capital Reserve Funds, with no contribution from the team. It should also be noted that as a result of the hybrid financing structure, the County will be required to issue an additional $35 million of PST bonds to fully fund stadium construction costs. As mentioned above, the annual rent payments by the Team will be used to offset debt service payments associated with the additional $35 million of debt. BASEBALL STADIUM AGREEMENT The BSA is the initial agreement of several agreements and bond -related documents relating to the baseball stadium that will come before the City Commission over the next several months. In addition to the Construction Administration Agreement, Management Agreement, Assurance Agreement, and Non -Relocation Agreement, the BSA also sets into motion several important site -related actions such as re -platting and road abandonment for the existing site, initial permitting and zoning, site survey, phase II environmental work, demolition and disposal of the existing Orange Bowl stadium, utility relocation, and planning for public infrastructure needs. As you will see in the BSA, the timelines for all of these actions require close coordination between the City, County, and Team to allow for an April 1, 2011, completion date (targeted completion date). Some of the key issues of the BSA, other than the financial commitments of the City, County, and Team, are shown below: �. Team Name Change — The Team will change its name to the Miami Marlins prior to the stadium completion date. 2. Baseball Stadium - The ballpark will be a first class Major League Baseball stadium at the Orange Bowl site owned by the County, having a retractable roof, a natural grass playing field, a capacity of approximately 37,000 seats, including approximately 3,000 club seats, approximately 60 private suites, 81,000 affordable seats throughout the regular season, and concession, entertainment and retail areas, fixtures, furnishings, equipment, features and amenities comparable with other recently constructed Major League Baseball ballparks, including but not limited to those in San Diego, St. Louis, Philadelphia, Pittsburgh, and Milwaukee. 3. Baseball Stadium Site - The Baseball Stadium Site, as defined in the BSA, consists of approximately 13 acres (Team estimate), inclusive of the stadium footprint, a perimeter of approximately 100 feet beyond the dripline of the stadium footprint, and an area to accommodate and provide support for the retractable roof. The Baseball Stadium Site is currently owned by the City but ownership will be conveyed to the County upon completion of the site development requirements detailed in Section 4.01 of the BSA. 3 4. Non -Relocation Agreement - The Team shall enter into a Non -Relocation Agreement that will unconditionally require the Team to maintain its Major League Baseball franchise in the City of Miami for the term of the Management Agreement. The Non -Relocation Agreement shall require the Team to operate and maintain a Major League Baseball franchise with the Baseball Stadium as its home stadium and to play all of its regular season and post -season home games at the Baseball Stadium. 5. Site Development — Some of the key provisions/deadlines related to development of the Baseball Stadium Site are as follows: • The City has previously delivered a Phase 1 Environmental Site Assessment Report to the County and the Team, and, prior to March 1, 2008, shall certify said Report to the County and Team, and, provide any appropriate updates to this report. • By March 10, 2008, a Limited Phase II Environmental Site Assessment Report addressing the Filling Station Site identified within the Phase I Report shall be certified by the City to the County and Team. Per applicable environmental law, the City will be responsible for remediation of any environmental contamination identified within this area and any environmental condition affecting the Public Infrastructure within the Entire Site, excluding environmental conditions within the Baseball Stadium Site. The Environmental conditions on the Baseball Stadium Site are covered to the extent of coverage provided in the environmental insurance policy purchased by the City and described below. Costs for remediating areas of the Baseball Stadium Site that are not covered by the insurance policy or which exceed the coverage limits, will be addressed in the Construction Administration Agreement as to the terms and cost allocations of such environmental remediation. • By March 15, 2008, an Expanded Phase II Environmental Site Assessment investigating soil and groundwater quality within that portion of the Entire Site not identified in the Limited Phase II Report mentioned above shall be certified by the City to the County and Team; the scope of the Expanded Phase II has previously been delivered to the County and Team. • At least 15 days prior to the Acceptance Date of the Site, the City will deliver a binder for an environmental insurance policy to insure the City, County, and Team for the Baseball Stadium Site. The environmental insurance policy will have coverage limits of $5 million per incident and limits of $5 million in the aggregate, with an understanding that the City will increase the coverage limits as necessary not to exceed a 50% increase over the premium for $5 million of coverage. The policy will exclude remediation of known conditions disclosed in the Phase I, Limited Phase II, and Expanded Phase II Environmental Assessment Reports, but will cover remediation costs and liability for conditions not disclosed by those reports. The policy will go into effect as of the site Acceptance Date. • The County and the Team, prior to Acceptance of the Baseball Stadium Site, shall have the right to undertake at their own expense, physical inspections or other investigations to determine the condition of the site in order to help select the best location for the Baseball Stadium Site and Public Infrastructure. • Promptly following the Effective Date, the County and the Team shall perform their necessary roles in a prompt and diligent manner with respect to the City's applications for replat of the Entire Site and approval of a Major Use Special Permit. • Within 10 days following the Effective Date of this Agreement, a title insurance commitment and opinions of title relating to the Entire Site shall be provided by the City committing to insure the County's acquisition of the Baseball Stadium Site; within 30 days of receipt of these documents, the County and Team shall examine all title documents and notify the City of any Title Defects. The County and Team, at their discretion, may also elect to purchase a title insurance policy if deemed necessary by the County and Team. If cost of said policy is less than or equal to $10,000, the policy shall be paid for by the Team, if over $10,000, shall be split equally between the County and the Team. • Prior to March 14, 2008, a survey of the Entire Site shall be provided to the City, County, and the Team. A revised survey shall be delivered to the County and the Team updating the perimeter of the Baseball Stadium Site within 60 days after the selection of the Baseball Stadium Site. 4 • Prior to March 31, 2008, the County, City, and Team shall agree on the location and layout of the Baseball Stadium Site, and, to the extent feasible, the location of Public Infrastructure within the Entire Site. • The City shall commence demolition of the Orange Bowl within 30 days of receipt of a binding letter of vested rights from the Florida Department of Community Affairs, or similar DRI- related preliminary agreement, and will complete demolition and debris disposal within 4 months thereafter. • From the Effective Date of this Agreement through 45 days following completion of the demolition of the Orange Bowl (Acceptance Date), the County and Team shall have the right to "Terminate for Site Condition" if not satisfied with the condition of the Entire Site. The County termination right shall only apply if the Team does not agree to pay cost of required remediation work in the case of identified environmental hazards or other site conditions. If the termination right is not exercised by the Acceptance Date, the County and the Team shall be deemed to have accepted the Baseball Stadium site in its condition as of that date. • Following Acceptance of the Baseball Stadium Site by the County and approval of the replat, MUSP, and other necessary City permits, the City shall convey to the County by Warranty Deed, fee simple title to the Baseball Stadium Site. The Warranty Deed shall provide for reversion of title to or at the direction of the City if the Management Agreement is terminated or the County fails to secure a replacement professional sports franchise for the Baseball Stadium within three (3) years after such termination. 6. Cost Overruns - The Team will be responsible for the hiring of the Design team, Stadium Developer, Construction Manager, Stadium Manager, and will be responsible for cost overruns, with the exception of "governmentally caused overruns" which are defined in the BSA, Section 4.09; at the time of execution of the Construction Administration Agreement the Stadium Developer shall provide the City and the County with evidence that is has in place a dedicated bank line of credit or other similar financial arrangement in the amount of at least $20,000,000 that may be used to pay for cost overruns. 7. Architect - The Team will retain HOK Sport, Inc., d/b/a HOK Sport+Venue+Event (HOK) as the lead architect for the Baseball Stadium. HOK must make reasonable good faith efforts to ensure compliance with the County's CBE-A/E program by the major design and construction professionals engaged by HOK. 8. Design Team — Within 30 days of the Effective Date, the parties shall form a five member design review committee to meet with the Design and Construction Professionals and the Construction Manager to develop no more than three conceptual recommendations of design related to the exterior aesthetics of the Baseball Stadium; one (1) member of the Design Team shall be appointed by the City Mayor or his Designee; the Design Team shall select a design with assistance from the Design and Construction Professionals and the Construction Manager within 10 business days following receipt of the conceptual recommendations. 9. Permits and Zoning — The City and County shall expeditiously process all applications for consents, approvals, and permits necessary to allow for the timely construction of the Baseball Stadium, City Parking, and Public Infrastructure. The BSA includes a 10 business day deadline for the City Manager and County Manager to act on written requests to execute applications, forms, or petitions necessary to meet development requirements for the Baseball Stadium. �0. Building Permit Liaison — Both the City and the County shall dedicate at least one member of its building permit staff, or other appropriate staff, to serve as a liaison for the Baseball Stadium Project and Public Infrastructure and expedite the permitting process and other City and County review and approval processes, at no cost to the Stadium Developer. The City's liaison shall by designated by the City Manager or his Designee. ��. Permit Fees — City or County petinit and other related fees applicable to the Baseball Stadium Project shall be customary and consistent with amounts charged for County or City -owned projects and shall be waived by the City or County, to the extent authorized as of the Effective Date by County or City code provision or administrative regulation. If waivable fees are advanced to the City or County by the Team Affiliate, such fees shall be promptly reimbursed to the Team Affiliate. 5 12. Other Development — The City shall keep the County and Team informed of any plans it develops for Other Development, which may include a soccer stadium, commercial, and retail components. The BSA (Section 4.11) provides for agreement between the City and the Team on the restrictions related to Other Development. The County and the Team shall have the right to review the plans and specifications as well as leases in respect of any Other Development, and, shall be a party to an appropriate legal instrument between the City, County, and Team with respect to these restrictions running with the Entire Site. 13. Public Infrastructure - The County and City will be responsible for public infrastructure needs such as road improvements, utility relocations, and traffic signalization improvements, as determined by the project design, with estimated costs, as well as the allocation of these costs between the City and County to be detailed in the Construction Administration Agreement. 14. Parking - The City will be responsible for construction, operation, and maintenance of parking facilities on the site, sufficient to house at least 6,000 parking spaces. The Team and the County shall have the right to review, comment upon, and approve the program and design features of the City Parking. The City, County, and Team shall each have approval rights for the location of the City Parking on the Entire Site. 15. State Funding — The City and the County shall make reasonable efforts and work cooperatively, including reasonable assistance from the Team, to secure funding from the State in the form of a sales tax rebate or other available State funding to defray costs related to the Baseball Stadium Project or the Baseball Stadium. Unless otherwise required by the State, the amount of any such State funding shall be deposited into the Capital Reserve Fund. 16. Community Events — The City and the County shall each have the right to use the Baseball Stadium eight days per year for amateur athletic, public service, or other non-profit events, provided all costs associated with its use, are covered by the City or County, as appropriate 17. Maintenance and Repairs — The Stadium Manager shall be required to undertake and pay the costs of all maintenance and repairs, including, but not limited to, game day operations, security on the Baseball Stadium Site, utilities, custodial services, premiums for insurance, and supplies and other consumable goods. The County shall use reasonable best efforts to assist the Stadium Manager to secure utilities for the Baseball Stadium at rates comparable to the County's reduced bulk rates. 18. Capital Reserve Fund — The Management Agreement shall provide for the creation of the Capital Reserve Fund, to be funded annually, as shown below. The BSA contemplates the creation of a Community Development District by the City, County, and Team for the purpose of developing, financing, operating, managing and maintaining certain basic infrastructure, public improvements and community facilities within the Entire Site. To the extent funding is available, the CDD would also, directly or indirectly, provide funding to the Capital Reserve Fund beginning in Year 11. Capital Reserve Fund Payment Schedule — Without State Funding Years 1 — 10 Years 11-20 Years 21-35 County $750,000 $750,000 $750,000 Team $750,000 $750,000 $750,000 City $250,000 $250,000 $250,000 City CDD $0 $250,000 $500,000 Total $1,750,000 $2,000,000 $2,250,000 Alternatively, and as discussed in Item 14, any State funding received shall be deposited into the Capital Reserve Fund. In such an event, the annual contributions to the Capital Reserve Fund by each party would be adjusted as shown below. This payment schedule assumes receipt of the $2,000,000 annual sales tax rebate: 6 Capital Reserve Fund Payment Schedule with State Funding Years 1-10 Years 11-20 Year 21-35 County $250,000 $500,000 $500,000 Team $250,000 $500,000 $500,000 City $0 $0 $0 City CDD $0 $250,000 $500,000 State $2,000,000 $2,000,000 $2,000,000* Total $2,500,000 $3,250,000 $3,500,000 *State sales tax rebate is 30 years in duration 19. Community Benefit Obligations - The Team is required to develop a strong and substantial community benefits package that shall include promotional and charitable activities for South Florida's youth through its Team Foundation, its advertisers and sponsors, and players and other Team personnel; such a package shall include affordable seats, complimentary tickets to underprivileged youth through appropriate Miami -Dade County charities, educational, athletic, health, and social and community programs; the Team shall also participate in Major League Baseball's Diverse Business Partners Program designed to create opportunities for minority and women owned businesses to participate in the procurement activities of Major League Baseball organizations. Also, the Stadium Manager shall make available at no charge, one suite to each regular season home game for public and/or charity use. The City and the County shall each have the right to designate the public or charity use for the suite for 27 games each, and the Stadium Manager shall designate the charity or other use for the remaining games. 20. Sale of Control Interest — Upon either a sale to a third party of a "control interest" in the Team or a sale of the Team's franchise within the first 5 years after the execution of this Agreement, the Team shall cause seller to pay to the City and County, to be split on a pro rata basis, an amount equal to a percentage of the net proceeds, as more precisely defined in Section 7.15 of the BSA. 21. Stadium Agreements — On or before March 30, 2008, the Team shall deliver to the City and County initial drafts of the Construction Administration Agreement, the Non -Relocation Agreement, the Assurance Agreement and the Management Agreement. Such agreements must be approved by all parties prior to July 1, 2008. 22. Termination Rights of City and County — The City or County may terminate this Agreement and be relieved of all liabilities under this Agreement (with the exception of breaches by the County or City prior to termination) if the parties cannot agree to the terms of any one or all of the Stadium Agreements by August 31, 2008. In such an event, each of the City, County, and Team shall be responsible for one-third of the total reasonable actual out-of-pocket costs expended by all three parties relating to the Baseball Stadium Project, from the Effective Date through the later of 1) the date of the notice of termination or 2) July 1, 2008, in the categories and approximate amounts detailed in the initial Draw Down Schedule in Exhibit E of the BSA). 23. Local Labor — We will work to ensure that the labor pool for construction of the stadium is fairly represented by the community. 24. Public Safety Services — The Management Agreement will address issues relating to staffing of Police and Fire services at the Baseball Stadium.