HomeMy WebLinkAboutPre-LegislationCity of Miami
Master Report
Enactment Number: R-10-0402
City Hall
3500 Pan American Drive
Miami, FL 33133
www.miamigov.com
File Number: 10-01116a
Version: 2
File Type: Resolution
Reference: Controlling Body: Office of the City
Clerk
File Name: Flagstone Introduced: 9/16/2010
Requester: Honorable Mayor Tomas Cost: Final Action: 9/23/2010
Regalado
Status: Passed
Title: A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), APPROVING
EXHIBIT A HERETO ("EXHIBIT A"), THE AMENDED AND RESTATED AGREEMENT TO
ENTER INTO GROUND LEASE ("AMENDED AND RESTATED AGREEMENT TO ENTER"), AND
THE AMENDED AND RESTATED GROUND LEASE(S) ("AMENDED AND RESTATED GROUND
LEASE(S)") (EACH IN SUBSTANTIALLY THE ATTACHED FORM(S)), BETWEEN THE CITY
OF MIAMI ("CITY") AND FLAGSTONE ISLAND GARDENS, LLC ("FLAGSTONE"), AND
AUTHORIZING AND DIRECTING THE CITY MANAGER AND THE CITY ATTORNEY TO
EXECUTE THE AMENDED AND RESTATED AGREEMENT TO ENTER, AND THE AA/ENDED
AND RESTATED GROUND LEASE PROVIDING FOR, INTER ALIA: (1) FLAGSTONES OPTION
TO DEVELOP THE MEGA -YACHT MARINA WITH ITS. ANCILLARY FACILITIES, RETAIL,
PARKING, HOTELS AND ALL OTHER RELATED FACILITIES (THE "PROJECT") IN ITS
ENTIRETY ALL AT ONCE OR THROUGH PHASED DEVELOPMENT ON A COMPONENT BY
COMPONENT BASIS; (2) EXTENDING THE POSSESSION DATE FROM FEBRUARY 1, 2010 TO
SEPTEMBER 1, 2013, OR SOONER, AT FLAGSTONE'S OPTION; (3) ESTABLISHING AN
ANNUAL PAYMENT SCHEDULE FOR ALL COMPONENTS COMMENCING WITH THREE
HUNDRED THOUSAND DOLLARS ($300,000) AND INCREASING TO TWO MILLION DOLLARS
($2,000,000) NO LATER THAN THE YEAR 2018, SUBJECT TO CERTAIN CREDITS AND OTHER
CONDITIONS RELATED TO DEVELOPMENT ON A COMPONENT BY COMPONENT BASIS; (4)
EXTENDING CERTAIN MILESTONE DATES IN THE TIMELINES FOR CONSTRUCTION
COMMENCEMENT, COMPLETION, AND OTHER DEVELOPMENT MATTERS AS SET FORTH
IN EXHIBIT A; AND (5) PROVIDING FOR SECURITY DEPOSIT(S), PROVIDED, HOWEVER
THAT SUCH APPROVAL, AUTHORIZATION AND DIRECTION ARE ALL SUBJECT TO AND
CONDITIONED UPON A SATISFACTORY DETERMINATION OF SECTION VIII, ENTITLED
"STATE WAIVER" OF EXHIBIT A REGARDING PAYMENTS TO THE STATE OF FLORIDA
("STATE"); FURTHER DIRECTING THE CITY MANAGER TO RETURN TO THE CITY
COMMISSION FOR APPROVAL REGARDING THE STATE WAIVER; FURTHER AUTHORIZING
AND DIRECTING THE CITY MANAGER AND THE CITY ATTORNEY TO MAKE
NON -SUBSTANTIVE REVISIONS AS NECESSARY TO EXHIBIT A, THE AMENDED AND
RESTATED AGREEMENT TO ENTER, THE AMENDED AND RESTATED GROUND LEASE(S)
ALL DOCUMENTS RELATING TO THE STATE WAIVER.
Sponsors:
Notes: Please include all attachments when certifying this resolution.
Indexes:
Attachments: 10-01116a Flagstone Resolution.pdf,10-01116a Flagstone Exhibit A.pdf,10-01116a Flagstone Liens and
State Waiver Modification.pdf,10-01116a Flagstone Agreement to Enter.pdf,10-01116a Flagstone
Ground Lease Part 1.pdf,10-01116a Flagstone Ground Lease Part 2.pdf,10-01116a Attachment 4 of the
Flagstone Ground Lease.pdf,
City of Miami Page I Printed on 3/31/2011
City of Miami
Master Report
EnactmentNumber: R-10-0402
City Hall
3500 Pan American Drive
Miami, FL 33133
wv N.miamigov.com
History of Legislative File
Version: Acting Body: Date: Action: Sent To: Due Date: Return Date: Result:
2 Office of the City 9/22/2010 Review Pending
Attorney
2 City Commission 9/23/2010 ADOPTED Pass
2 Office of the City 9/23/2010 Reviewed and
Attorney Approved
2 Office of the Mayor 9/23/2010 Signed by the Mayor Office of the City
Clerk
2 Office of the City Clerk 9/23/2010 Signed and Attested
by City Clerk
City of Miami Page 2 Printed on 3/31/2011
City of Miami
Legislation
Resolution: R-10-0402
City Hall
3500 Pan American
Drive
Miami, FL 33133
www.miamigov.com
File Number: 10-01116a Final Action Date: 9/23/2010
A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S),
APPROVING EXHIBIT A HERETO ("EXHIBIT A"), THE AMENDED AND
RESTATED AGREEMENT TO ENTER INTO GROUND LEASE ("AMENDED AND
RESTATED AGREEMENT TO ENTER"), AND THE AMENDED AND RESTATED
GROUND LEASE(S) ("AMENDED AND RESTATED GROUND LEASE(S)") (EACH
IN SUBSTANTIALLY THE ATTACHED FORM(S)), BETWEEN THE CITY OF
MIAMI ("CITY") AND FLAGSTONE ISLAND GARDENS, LLC ("FLAGSTONE"), AND
AUTHORIZING AND DIRECTING THE CITY MANAGER AND THE CITY
ATTORNEY TO EXECUTE THE AMENDED AND RESTATED AGREEMENT TO
ENTER, AND THE AMENDED AND RESTATED GROUND LEASE PROVIDING
FOR, INTER ALIA: (1) FLAGSTONE'S OPTION TO DEVELOP THE MEGA -YACHT
MARINA WITH ITS ANCILLARY FACILITIES, RETAIL, PARKING, HOTELS AND
ALL OTHER RELATED FACILITIES (THE "PROJECT") IN ITS ENTIRETY ALL AT
ONCE OR THROUGH PHASED DEVELOPMENT ON A COMPONENT BY
COMPONENT BASIS; (2) EXTENDING THE POSSESSION DATE FROM
FEBRUARY 1, 2010 TO SEPTEMBER 1, 2013, OR SOONER, AT FLAGSTONE'S
OPTION; (3) ESTABLISHING AN ANNUAL PAYMENT SCHEDULE FOR ALL
COMPONENTS COMMENCING WITH THREE HUNDRED THOUSAND DOLLARS
($300,000) AND INCREASING TO TWO MILLION DOLLARS ($2,000,000) NO
LATER THAN THE YEAR 2018, SUBJECT TO CERTAIN CREDITS AND OTHER
CONDITIONS RELATED TO DEVELOPMENT ON A COMPONENT BY
COMPONENT BASIS; (4) EXTENDING CERTAIN MILESTONE DATES IN THE
TIMELINES FOR CONSTRUCTION COMMENCEMENT, COMPLETION, AND
OTHER DEVELOPMENT MATTERS AS SET FORTH IN EXHIBIT A; AND (5)
PROVIDING FOR SECURITY DEPOSIT(S), PROVIDED,HOWEVER THAT SUCH
APPROVAL, AUTHORIZATION AND DIRECTION ARE ALL SUBJECT TO AND
CONDITIONED UPON A SATISFACTORY DETERMINATION OF SECTION VIII,
ENTITLED "STATE WAIVER" OF EXHIBIT A REGARDING PAYMENTS TO THE
STATE OF FLORIDA ("STATE"); FURTHER DIRECTING THE CITY MANAGER TO
RETURN TO THE CITY COMMISSION FOR APPROVAL REGARDING THE
STATE WAIVER; FURTHER AUTHORIZING AND DIRECTING THE CITY
MANAGER AND THE CITY ATTORNEY TO MAKE NON -SUBSTANTIVE
REVISIONS AS NECESSARY TO EXHIBIT A, THE AMENDED AND RESTATED
AGREEMENT TO ENTER, THE AMENDED AND RESTATED GROUND LEASE(S)
ALL DOCUMENTS RELATING TO THE STATE WAIVER.
WHEREAS, the City of Miami ("City") is the owner of certain real property located on Watson
Island at approximately 1050 MacArthur Causeway, Miami, Florida (the "Property"); and
WHEREAS, 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"), for
City of Miami
Page 1 of 4 File Id: 10-01116a (Version: 2) Printed On: 3/31/2011
File Number: 10-01116a
Enactment Number: R-10-0402
development on the Property of a mega -yacht marina with its ancillary facilities, retail, parking, hotels
and all other related facilities (the "Project") Flagstone Properties, LLC submitted a proposal and was
selected as the most qualified responsive and responsible bidder; and
WHEREAS; the City Commission. pursuant to Resolution No. 01-972, adopted September 17,
2001, and Resolution No. 01-1028, adopted September 25, 2001, polled the electors of the City of
Miami regarding leasing the Property to Flagstone Properties, LLC for the Project and pursuant to
Referendum on November 6, 2001 (the "Referendum") the voters returned an affirmative vote; and
WHEREAS, Flagstone Properties LLC subsequently merged with Flagstone Island Gardens, LLC
(collectively, "Flagstone"), and pursuant to City Commission Resolution No. 02-1304, adopted
December 12, 2002, entered into an Agreement to Enter Into Ground Lease, with the City, dated
January 1, 2003 with exhibits and attachments thereto (the "Agreement to Enter") including the form of
proposed Ground Lease (the "Ground Lease"); and
WHEREAS, the Agreement to Enter has certain conditions that must be met for the future
execution of a long-term Ground Lease with Flagstone; and
WHEREAS, the City and Flagstone agreed upon and entered into 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"); and
WHEREAS, the City and Flagstone agreed upon and entered into that certain Second Amendment
to Enter Into Ground Lease dated December 8, 2006 (the "Second Amendment to Agreement to
Enter"); and
WHEREAS, Flagstone experienced delays in obtaining financing due to the downturn in the real
estate market requiring adjustments to the Lease Deadline referred to in Section 6.2.1 of the
Agreement to Enter and to the Outside Date referred to in Section 6.2.3 of the Agreement to Enter to
February 1, 2010; and
WHEREAS, Flagstone and the City agreed upon and entered into a 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"); and
WHEREAS, the RFP contemplates that the Project may be developed by one developer on a
component by component basis; and
WHEREAS, Flagstone has requested additional modifications to the Agreement to Enter and to
the Ground Lease to allow them sufficient time to secure financing and begin and complete
construction on the Project; and
WHEREAS, in connection with the cooperation provisions of the Agreement to Enter, Flagstone
has agreed to allow the City to use the Property, without prior notice to Flagstone, for the City's and
other user's benefit, as the City may deem appropriate, prior to the City's issuance of Flagstone's
building permit, or September 1, 2013, whichever comes earlier; and
WHEREAS, the parties have negotiated and desire to enter into the terms and conditions of Exhibit
A hereto ("Exhibit A"), the Amended and Restated Agreement to Enter into Ground Lease ("Amended
City of Miami Page 2 of 4 File Id: 10-01116a (Version: 2) Printed On: 3/31/2011
File Number: 10-01116a Enacnnent Number: R-10-0402
and Restated Agreement to Enter") and the Amended and Restated Ground Lease(s) ("Amended and
Restated Ground Lease(s)"), each in substantially the attached form(s), providing for, inter alia, (1)
Flagstone's option to develop the Project in its entirety all at once, or on a component by component
basis as described in the attached Exhibit A, incorporated herein by this reference; (2) extending the
possession date from February 1, 2010 to September 1, 2013, or sooner, at Flagstone's option; (3)
establishing an annual payment schedule based upon all components commencing with three hundred
thousand dollars ($300,000) and increasing to two million dollars ($2,000,000) by year 2018, subject to
certain credits and certain conditions related to development on a component by component basis, as
described in Exhibit A; (4) extending certain milestone dates in the timelines for construction
commencement, completion, and other development matters as set forth in Exhibit A; and (5)
providing for security deposit(s); and
WHEREAS, on January 28, 2010 in connection with Mayor's Discussion Item No. 10-00089, the
City Commission authorized an extension of the expiring Agreement to Enter until the March 11, 2010
City Commission meeting in order to permit further negotiations regarding the terms and conditions of
extension; and
WHEREAS, on March 11, 2010, the City Commission pursuant to Resolution No. 10-0091,
authorized an extension of the expiring Agreement to Enter until the March 25, 2010 City Commission
meeting in order to permit further negotiations regarding the terms and conditions of extension; and
WHEREAS, on March 25, 2010, the City Commission pursuant to Resolution No. 10-0144,
authorized a further extension of the expiring Agreement to Enter until the April 22, 2010 City
Commission meeting in order to continue negotiations regarding terms and conditions of the
extension; and
WHEREAS, on April 22, 2010, and at subsequent City Commission meetings on on May 13, 2010
and on June 24, 2010, the Mayor reported to the City Commission that negotiations were continuing
regarding terms and conditions of the extension; and
WHEREAS, on September 16, 2010, the City Commission authorized the parties, inter alia, to
submit their final documents, terms and conditions on that date to be considered by the City
Commission at the September 23, 2010 meeting and required Flagstone to provide a $200,000.00
certified check to the City by September 23rd for the Consideration for Use payments from February 1,
2010 to September 30, 2010; and
WHEREAS, the proposed changes in the Amended and Restated Ground Lease(s) are required to
be approved by the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida
("Board of Trustees") as required by the Partial Modification of Restrictions for the Property, filed for
record March 18, 2005 in Deed Book 23181, Page 775 of the Public Records of Miami -Dade County,
Florida (the "Partial Modification of Restrictions") which modifies the restrictions set forth within Deed
No. 19447 from the Board of Trustees in favor of the City filed for record April 11, 1949 in Deed Book
3130, Page 257 of the Public Records of Dade County, Florida;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI,
FLORIDA:
Section 1. The recitals and findings contained in the Preamble to this Resolution are adopted by
reference and incorporated as if fully set forth in this Section.
City of Miami Page 3 of 4 File Id: 10-01116a (Version: 2) Printed On: 3/31/2011
File Number: 10-01116a Enacnnent Number: R-10-0402
Section 2. The City Commission approves Exhibit A, the Amended and Restated Agreement to
Enter, and the Amended and Restated Ground Lease(s) (each in substantially the attached form(s),
between the City and Flagstone, and authorizes and directs the City Manager{1} and the City Attorney
to execute the Amended and Restated Agreement toEnter, and the Amended and Restated Ground
Lease(s) providing for, inter alia: (1) Flagstone's option to develop the Project in its entirety all at once,
or on a component by component basis, as described in the Exhibit A; (2) extending the possession
date from February 1, 2010 to September 1, 2013, or sooner, at Flagstone's option; (3) establishing an
annual payment schedule for all components commencing with three hundred thousand dollars
($300,000) and increasing to two million dollars ($2,000,000) by year 2018, subject to certain credits
and other conditions related to development on,a component by component basis, as described in
Exhibit A; (4) extending certain milestone dates in the timelines for construction commencement,
completion, and other development matters as set forth in Exhibit A; and (5) providing for security
deposit(s); provided, however that such approval, authorization and direction are all subject to and
conditioned upon a satisfactory determination of Section VIII, entitled "State Waiver" of Exhibit A
regarding payments to the State; and further directing the City Manager to return to the City
Commission for approval regarding the State Waiver.
Section 3. The City Manager and the City Attorney are further authorized{1} and directed to make
non -substantive revisions as necessary to Exhibit A, the Amended and Restated Agreement to Enter,
the Amended and Restated Ground Lease(s), and all documents related to the State Waiver.
Section 4. This Resolution shall become effective immediately upon its adoption and signature of
the Mayor.{2}
Footnotes:
{1} The herein authorization is further subject to compliance with all requirements that may be
imposed by the City Attorney, including but not limited to those prescribed by applicable City Charter
and Code provisions.
{2} If the Mayor does not sign this Resolution, it shall become effective at the end of ten calendar days
from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become
effective immediately upon override of the veto by the City Commission.
City of Miami Page 4 of 4 File Id: 10-01116a (Version: 2) Printed On: 3/31/2011
EXTIED3IT A
This Exhibit A is an attachment to City Commission Resolution No. 10- adopted
2010, contains material business terms, and becomes Composite
Attachment 3 to the Amended and Restated Agreement to Enter Into Ground Lease
(hereinafter, the "Agreement to Enter") and to the form of Amended and Restated Ground
Lease(s) (hereinafter the "Ground Lease(s)"). All terms used herein but not defined herein
shall have the definitions given to them in the Agreement to Enter or in the form of Ground
Lease(s).
I. GENERAL CONSTRUCTION SCH N-DULE FOR ALL MAJOR PROJECT
COMPONTENTS.
Flagstone/Ground Lessee shall have the time periods set forth below to commence and
complete construction of the various Major Project Components, as such Major Project
Components are approved in accordance with the Major Use Special Permit and as such are
defined in Section _ of the form of Ground Lease(s). Throughout this Exhibit A, (a)
"Commence(s) Construction" or "Start(s) Construction" shall mean that all material plans and
permits are approved and issued and the actual act of physical construction has begun; and (b)
"Completion Date" shall mean the date upon which the earlier of the temporary certificate of
occupancy ("TCO") or a certificate .of occupancy ("CO"), has been issued for the completion of
construction.
Until 9/1/2013 36 months from 9/1/2010 to Start Construction of the Marina Component.
(a) As described in Section VI(c) below, Marina Component
construction may be started earlier and separately from the
Parking/Retail Components once applicable conditions precedent
for Marina Component have been met.
Until2/28/2015 54 months from 9/1/2010 to the Completion Date of the Marina
Component.
(a) If Marina Component Starts Construction earlier than 9/1/2013,
then Flagstone shall have 18 months from such earlier start date to
the Completion Date of the Marina Component.
Until 9/1/2016
Until 8/31/2019
72 months from 9/1/2010 to Start Construction of both the Retail/Parking
Components
108 months from 9/1/2010 to the Completion Date of Retail/Parking
Components.
1
(a) Parking spaces for Hotels may be completed separately with
construction of Hotels Components.
(b) Flagstone agrees to design, construct and provide utility lines
needed for each of the Major Project Components on a component
by component. basis as necessary and as approved by the City and
as required by the Master Declaration as a condition precedent to
executing the first Ground Lease. Flagstone shall design, constrict
and provide utility lines needed for both Hotel Components in
connection with the construction of utility lines for the
Parking/Retail Components.
Until9/1/2018 96 months from 9/1/2010 to Start Construction of both Hotels
Components, if the two (2) 5-year Options to extend described below are
not exercised, therefore until 8/31/2020 (being twenty-four (24) months)
to the Completion Date. Flagstone cannot exercise the second Option if no
hotel constriction has commenced by 8/31/2023.
Until 9/1/2023 156 months from 9/1/2010 to Start Construction of a Hotel Component, if
only the first 5-year Option to extend is exercised. Accordingly, the first
Option period ends on 8/31/2023.
(a) During the first Option period, a Hotel Component must be completed within twenty-four
(24) months after Construction Commencement, therefore until 8/31/2025 to the
Completion Date of at least one Hotel Component. Accordingly, both the Rent(s)
payments schedule and the Option payments schedule in this Exhibit A would apply
throughout the entire period of construction, even if the Completion Date of such
construction period runs beyond the Option period.
(b) The first 5-year Option period runs from 9/01/2018 through 8/31/2023. The first Option
period payment is $250,000 per annum ($125,000 per Hotel Component per annum) with
monthly payments beginning 9/01/2018 for the first Option period ending 8/331/2023.
(c)
All Option payments are to be paid monthly in advance beginning on the first day of the
month. The first Option is exercised by Flagstone's giving not less than thirty (30) days
advance written notice prior to 8/31/2018 to the City for the first Option period to begin.
. Until 9/1/2028 216 months from 9/1/2010 to Start Construction of the second Hotel
Component if Flagstone exercises the second 5-year Option to extend;
accordingly, the second Option period ends on 8/31/2028:
(a) The second 5-year Option period runs from. 9/01/2023 through
8/31/2028. The second 5-year Option period payment is $315,000
per annum ($157,500 per Hotel Component per annum) with
monthly payments beginning 9/01/2023 for the second Option.
period ending 8/31/2028, but second 5-year Option is not available
2
unless the first Hotel Component Starts Construction before the
end of the first 5-year Option period on 8/31/2023.
(b) All Option payments are to be paid monthly in advance beginning
on the first day of the month. The second Option is exercised by
Flagstone's giving not less than thirty (30) days advance written
notice prior to 8/31/2023 to the City for the second Option period
to begin.
(c) During the second Option period, the second Hotel Component
must be completed within twenty-four (24) months after Flagstone
Commences Construction, therefore until 8/31/2030 to reach the
Completion Date of the second Hotel Component that commenced
construction during the second Option period. Accordingly, both
the Rent(s) payments schedule and the Section IV Option
payments schedule in this Exhibit A would apply throughout the.
entire period of construction, even if such construction period runs
beyond the Option period.
GENERAT; RENT(S) PAYMRNT SCHEDULE FOR ALL MAJOR PROJECT
COMPONENTS.
During the periods outlined below, Flagstone/Ground Lessee shall pay to the City the
amounts outlined below.
Beg nnin
., a _ -,. g :
4nnual
Amount ...
L
..._ . •_ ... ,.
2/1/2010
through
9/30/2010
$200,000
Consideration for Extension Period. This amount
shall not be applied as a credit.
10/1/2010
$300,000
$300,000 is a Pre -Payment of Construction
Rent/Base Rent to City
10/1/2011
$500,000
$500,000 is a Pre -payment of Construction
Rent/Base Rent to City
10/1/2012
$750;040
$750,000 is a Pre -payment of Construction
Rent/Base Rent to City
10/1/2013
$1,000,000
$1,000,000 Construction Rent, subject to II(g)
below
10/1/2014
$1,000,000
$1,000,000 Construction Rent, subject to II(g)
below
10/1/2015
$1,000,000
$1,000,000 Construction Rent, subject to II(g)
below
10/1/2016
$1,140,000*
$1,500,000 Construction Rent is the amount
actually received by City since $360,000 was pre-
paid for this year per above schedule and Section
II (g) below, unless there is no credit pursuant to
Section VI(a) below.
3
Beginning
Annual
_amount
10/1/2017
.
$1,315,000*
$1,675,000 Construction Rent is the amount
actually received by City since $360,000 was pre-
paid pursuant to the above schedule and Sections
II (g) below, unless there is no credit pursuant to
Section VI(a) below.
10/1/2018
and annually
thereafter
$1,640,000*
$2,000,000 Base Rent is the amount actually
received by City since $360,000 was pre -paid
pursuant to the above schedule and Section Il(g)
below, unless there is no credit pursuant to
Section VI(a) below. Base Rent continues until
term nation of Ground Lease(s). Additionally,
Percentage Rent payments begin as described in
(d) below.
•
10/1/2019
$1,640,000*
$2,000,000 Base Rent is the amount actually
received by City since $360,000 was pre -paid
pursuant to the above schedule and Section II (g) .
below, unless there is .no credit pursuant to
Section VI(a) below. Additionally, Percentage
Rent payments continue as described in (d) below.
10/1/2020
$1,890,000*
$2,000,000 Base Rent is the amount actually
received by City since $110,000 was pre -paid
pursuant to the above schedule and Section II(g)
below, unless there is no credit pursuant to
Section VI(a) below. Additionally, Percentage
Rent payments continue as described in (d) below
until the termination of Ground Lease(s).
*Notwithstanding the Annual Amounts set forth above and pursuant to Section
I1(g) below, credits of the Pre -Payment of Construction/Base Rent cannot be given
until the Marina Component Starts Construction prior to 9/1/2013 and both of the
Parking/Retail Components Start Construction prior to 9/1/2016 pursuant to the
above General Construction Schedule for All Major Project Components. As
stated in Section II(g) below, when all (i) of the Marina Component Starts
Construction prior to 9/1/2013 and (ii) the Retail/Parking Components Start
Construction prior to 9/1/2016, then credit of the Pre -Paid Construction/Base Rent
begins the month following the date upon which all of those three (3) specific
Components have started construction.
(a) Once payment of Base Rent begins from Flagstone to the City, the City is
obligated six (6) months thereafter under the State Waiver (as defined in Section
VII below) to pay an annual fee to the State of Florida.
(b) During the thirty-six (36) months after 9/01/2010 to 8/31/2013, Flagstone has a
.10-day..grace period beyond the first .of each ,month _to make each "Pre -Paid
Construction Rent" payment, and agrees to not require any notice from the City in
the event of non-payment of any "Pre -Paid Construction Rent" payment. In the
event that Flagstone defaults for non-payment, Flagstone also agrees to waive its
defenses as to non-payment against the City, immediately vacate and turn over to
the City for the City's possession all of Flagstone's rights, and interests in. the
Property and the easement areas, remove from such easement areas and frorn the
Property all of its property of whatever kind as requested in writing by the City
Manager, and immediately (i) return or sign over, as applicable, to the City all of
Flagstone's rights, directly or indirectly, in the permits, plans, specifications, and
all related governmental approvals, documents, instruments, and agreements as
necessary related to the Property, and (ii) deliver to the City all of such permits,
plans, specifications, and all related . governmental approvals, documents,
instruments, and agreements which are in Flagstone's possession or in Flagstone's
control.
(c)
All payments to the City .(for various Rents and for Option payments) are to be
paid monthly in advance beginning on the first day of the month, except for the
lump sum payment Flagstone shall pay to the City upon the date of City
Commission Approval of the Agreement to Enter and the Ground Lease, for the
Consideration of Extension Period amount from February 1, 2010 through
September 30, 2010.
(d) Additionally, if the Agreement to Enter is not signed in the same month of City
Commission Approval, then Flagstone shall also pay a lump sum payment amount
of $25,000 per month for each month from October 1, 2010 until the Agreement
to Enter is executed.
(e)
Additional provisions regarding Percentage Rent payments are included. in the
form of each Amended and Restated Ground Lease(s). As stated therein,
Percentage Rent on the Gross Revenues of each Component begins on the third
anniversary after each Major Project Component is Open for Business. "Open for
Business" means the earlier of the date that the applicable . Major Project
Component receives either its.TCO or CO. Base Rent may begin sooner than
02/01/2018 (i.e., if both Hotels are Open for Business prior to that time, as set
forth in the Amended and Restated Hotel Ground Lease).
(f) As stated in the applicable Amended and Restated . Ground Leases, once Base
Rent begins, it continues each year for the remaining term of the applicable
Ground Lease(s). On the first anniversary of the commencement of the Base Rent
for each Major Project Component, the Base Rent thereafter becomes subject to
an annual Consumer Price Index ("CPI") adjustment as set forth in the Ground
Lease(s). Percentage Rent on the Gross Revenues of each Major Project
Component begins on the third anniversary after each Major Project Component
is Open for Business.
.5
(g)
If the Marina Component Starts Construction prior to 9/1/2013 and the
Retail/Parking Component(s) both Start Construction prior to 9/1/2016, then on
the first day of the month following the date when the Marina Component and
the Retail/Parking Component(s) (all 3 such Components) have started
construction, the Construction Rent payment (subject to credits described in (g)
below) becomes at least $1,000,000 per year, as opposed to the lesser Prepaid
Construction/Base Rent payment amounts shown on the above Section II General
Rents Payment Schedule for All Major Project Components.
(h) If the Marina Component Starts Construction prior to 9/1/2013 and the
Retail/Parking Component(s) (all 3 such Components) Start Construction by
9/1/2016, then as shown on the above Section II General Rent(s) Payment
Schedule for All Major Project Components, Flagstone is entitled to a credit back
of Pre -Paid Construction Rent/Base Rent each year beginning in the month
following the date upon which construction has started on all 3 such Components
in the amount of $30,000 per month for fifty-one (51) months and of $20,000 for
the 52nd month until Flagstone has received a total aggregate credit of $1,550,000.
This monthly credit is a return of Pre -Paid Construction/Base Rent paid by
Flagstone between 9/1/2010 and 8/31/2013. If Flagstone .Starts Construction of
all three (3) of the Marina Component and the Retail/Parking Components prior to
9/1/2013, then the total credit back amount is reduced by 1/36th for each month
prior to 2/1/2013 that all such Components have commenced. Conversely, if
Flagstone does _not Commence Construction of all three (3) of the Marina
Component and the Retail/Parking Components by 8/31/2016, then no credit of
Prepaid Construction Rent is allowed and the City keeps all of the Prepaid
Construction Rent amount received.
(i) If no construction begins by 9/1/2013 on any Major Project Component, then the
City keeps all Prepaid Construction/Base Rent; Flagstone, agrees to not require
any notice from the City to terminate for failure to begin construction, and
Flagstone also agrees to waive its defenses against the City, immediately vacate
and turn over to the City for the City's possession all of Flagstone's rights and
interests in the Property and the easement areas, remove from such easement
areas and from the Property all of its property of whatever kind as requested in
writing by the City Manager, and immediately (i) return or sign over, as
applicable, to the City all of Flagstone's rights, .directly or indirectly, in the
permits, plans, specifications, and all related governmental approvals, doc»rnents,
instruments, and agreements as necessary related to the Property, and (ii) deliver
to the City all of such permits, plans, specifications, and all related governmental
approvals, documents, instruments, and agreements which are in Flagstone's
possession or in Flagstone's control.
M. OPTION PAYMT',NT SCHEDULE (FIRST OPTION).
Flagstone has two (2) 5-year Options ("Option(s)") to extend the date to Commence
Construction of the Hotels Components, and Flagstone has the choice to build either one Hotel
6
Conaponent or two Hotel Components; that choice triggers Option payments for one Hotel
Component or two Hotels Components accordingly.
If Flagstone exercises the first Hotel Option period for only one Hotel Component,
Flagstone must also pay to the City the following additional Option payment amounts.
Begirnin g
nnual; Option;;.
a inert
:Oite Hoote.
9/1/2018
9/1/2019
9/1/2020
9/1/2021
9/1/2022
$125,000
S 125,000
$125,000
$125,000
$125,000
$2,000,000
$2,000,000
$2,000,000
S2,000,000
S2,000,000
$2,125,000 (Base Rent plus
Option payment)
$2,125,000 (Base Rent plus
Option payment)
$2,125,000 (Base Rent plus
Option payment)
$2,125,000 (Base Rent plus
Option payment)
$2,125,000 (Base Rent plus
Option payment)
If Flagstone exercises the first Hotel Option period for two (2) Hotel(s) Components,
Flagstone must also pay to the City the following additional Option payment amounts.
Beginning
Annual Option
-
payments (for
A'nnuaI Base
�,
` '%
.Annual-rno'unts
1 to the City
9/1/2018
$250,000
$2,000,000
$2,250,000 .(Base Rent plus
Option payments)
9/1/2019
$250,000 •
$2,000,000
$2,250,000 (Base Rent plus
Option payments)
9/1/2020
$250,000
$2,000,000
$2,250,000 (Base Rent plus
Option payments)
9/1/2021
$250,000
$2,000,000
$2,250,000 (Base Rent plus
Option payments)
9/1/2022
$250,000
• $2,000,000
•
$2,250,000 (Base Rent plus
Option payments)
(a) As indicated in Section II(a) above, once payment of Base Rent begins from
Flagstone to the City, the City is obligated six (6) months thereafter under the
State Waiver (as defined in Section V11 below) to pay an annual fee to the State of
Florida.
7
(b)
(c)
Flagstone can exercise the Option for only one Hotel Component or for. both
Hotel Components, or stop Option payments at any time by giving written notice
to the City at least thirty (30) days before the date that the next Option payment is
due, but if Flagstone elects not to exercise the Option for one or both Hotel
Component(s), or fails to make any Option payment(s), then Flagstone must turn
over to the City immediately any applicable Hotel Ground Lease(s), Flagstone
also agrees to waive its defenses as to failure to pay the required Option
payments, immediately vacate and turn over to the City for the City's possession
all of Flagstone's rights and interests in the Hotel Component(s), any Hotel
Ground. Lease, and the applicable easement areas, remove from such easement
areas all of its property of whatever kind as requested in writing by the City
Manager, and immediately (i) return or sign over, as applicable, to the City all of
Flagstone's rights, directly or indirectly, in the permits, plans, specifications, and
all related governmental approvals, documents, instruments, and agreements as
necessary related to the applicable Hotel Component(s), and (ii) deliver to the
City all of such permits, plans, specifications, and all related governmental
approvals, documents, instruments, and agreements relating to the applicable
Hotel Component(s) which are in Flagstone's possession or in Flagstone's
control, and City has the rights to seek a new developer for the applicable Hotel.
Component(s).
For Any Hotel(s) Component(s) that Start(s) Construction during the -9rst Option
period and continue construction into the second Option period, the Option
payments shall increase on 9/01/2023 to the second Option period Option
payment amount(s) set forth below in Section IV, and shall continue at such
second Option payment amount(s) until the Completion Date. Such Option
payments for the Hotel(s) Component(s) are in addition to the required
Construction Rent, Base Rent, Percentage Rent, CPI Adjustments, Marina Rent,
and any other Rents for the Hotels and any other Major Project Components.
IV. OPTION PAYMENTS SCH-.F+;DULE (SECOND OPTION).
If Flagstone exercises its second Hotel Option period for one Hotel Component only,
Flagstone must pay to the City the following additional amounts:
Beginning
Annual Optfon '
payment (For
5
neHo - Otel �
Only)
Annual Base
Reent
- '. "_
n
- Anual Amanntsr
o l , tthe'C t3'
, ..': ..._ ' ., ,. '.. .
9/1/2023
$157,500
$2,000,000
$ 2,157,500
9/1/2024
$157,500
$2,000,000
$ 2,157,500
9/1/2025
$157,500
$2,000,000
$ 2,157,500
9/1/2026
$157,500
$2,000,000
$ 2,157,500
9/1/2027
$157,500
$2,000,000
$ 2,157,500
If Flagstone exercises its second Hotel Option period for two Hotel Components,
Flagstone must pay to the City the following additional amounts:
rnn: b
Be ginning
Annual Option
a. �inents or
l? and
2 Hotel)
- _
`. 4nnual Base :
Rent
Annualounts
::to theCity :.
9/1/2023
$315,000
$2,000,000
$ 2,315,000
9/1/2024
S315,000
$2,000,000
$ 2,315,000
9/1/2025
$315,000
$2,000,000
$ 2,315,000
9/1/2026
$315,000
$2,000,000
$ 2,3.15.000
9/1/2027
$315,000
$2,000,000
$ 2,315,000
(a)
(b)
(c)
As indicated in Section II(a) above, once payment of Base Rent begins from
Flagstone to the City, the City is obligated six (6) months thereafter under the
State Waiver (as defined in Section VII below) to pay an annual fee to the State of
Florida.
Because Flagstone has twenty-four (24) months to complete construction of any
Hotel(s) Component, Flagstone shall continue to make Option payments to the
City beyond 8/31/2028 until such time that the final Hotel(s) Component(s)
construction has reached the final Completion Date. Flagstone can stop Option
payments at any time by giving written notice to the City at least thirty (30) days
before the date that the next Option payment is due, but if Flagstone elects not to
or fails to make any Option payment(s), then Flagstone must turn over to the City
immediately the Hotel Ground Lease(s) for the . Hotel which is not to be
constructed, Flagstone also agrees to waive its defenses as to failure to pay the
required Option payments, immediately vacate and turn over to the City for the
City's possession all of Flagstone's rights and interests in the Hotel
Component(s), any Hotel Ground Lease, and the applicable easement areas,
remove from such easement areas all of its property of whatever kind as requested
in writing by the City Manager, and immediately (i) return or sign over, as
applicable, to the City all of Flagstone's rights, directly or indirectly, in the
permits, plans, specifications, and all related governmental approvals, documents,
instruments, and agreements as necessary related to the applicable Hotel, and (ii)
deliver to the City all of such permits, plans, specifications, and all related
governmental approvals, documents, instruments, and agreements relating to the
applicable Hotel Component(s) which are in Flagstone's possession or in
Flagstone's control, and City has the rights to seek a new developer for the
applicable Hotel Component(s).
If Flagstone does not Start Construction of the second Hotel Component by
9/1/2028, then both the City and Flagstone have their separate rights to terminate
the Agreement to Enter and Flagstone must immediately vacate and turn over to
the City for the City's possession all of Flagstone's rights and interests in the
Property related to the second .Hotel Component and the easement areas, remove.
from such easement areas and from the Property related to the second Hotel
9
Component all of its property of whatever kind as requested in writing by the City
Manager, and (i) return or sian over, as applicable, to the City all of Flagstone's
rights, directly or indirectly, in the permits, plans, specifications, and all related
governmental approvals, documents, instruments, and agreements as necessary
related to the applicable Hotel, and (ii) deliver to the City all of such permits,
plans, specifications, and all related governmental approvals, documents,
instruments, and agreements relating to the applicable Hotel Component(s) which
are in Flagstone's possession or. in Flagstone's control, and City has the rights to
seek a new developer for the applicable Hotel Component(s).
(d) Flagstone has a 10-day grace period beyond the first of each month to make each
Option payment, and agrees to not require any notice from the City in the event of
non-payment of any Option payment. In the event that Flagstone defaults for non-
payment, Flagstone also agrees to waive its defenses as to non-payment against
the City, immediately vacate and turn over to the City for the City's possession all .
of Flagstone's rights and interests in the Second Hotel Component and the
easement areas, remove from such easement areas and from the Second Hotel
Component all of its property of whatever kind as requested in writing by the City
Manager, and immediately (i) return or sign over, as applicable, to the City all of
Flagstone's rights, directly or indirectly, in the permits, plans, specifications, and
all related governmental approvals, documents, instruments, and agreements as
necessary related to the Second Hotel Component, and (ii) deliver to the City all
of such permits, plans, specifications, and all related governmental approvals,
documents, instruments, and agreements which are in Flagstone's possession or in
Flagstone's control.
V. ADDITIONAL AGREEMENTS CONCERNING HOTEL COMPONENTS.
(a) No Hotel Component can Start Construction until both the Marina Component
and the Parking/Retail Components Start Construction.
(b) Once a Hotel Component .reaches its Completion Date, the Option payments for
that Hotel Component stop. For the portion of any construction period that
extends into the Option period, all applicable Option payment(s) (and all ongoing
Construction Rent payments) shall continue until the Completion Date. (Pursuant
to the applicable Ground Lease(s), the "Percentage Rent Payment Beginning
Anniversary Date" starts running for any Hotel on the date when it is Open for
Business and Percentage Rent payments begin on the third anniversary of the
Percentage Rent Payment Beginning Anniversary Date in order to give that Hotel
a Stabilization Period).
(c)
The second Option period cannot be exercised unless one Hotel Component has
started construction before the end of the first Option period. If one Hotel
Component does not Start Construction before the end of the first Option period,
then the Option period terminates and no second Option exists. If the second
Hotel Starts Construction before the end of the first Option period and continues
construction into the second Option period, then the Option payments applicable
10
to the second Option period shall be due upon commencement of the second
Option period until the second Hotel Component reaches its Completion Date.
(d) Upon entering into the Ground Lease for any Hotel Component(s) and prior to
Starting Construction for any such Hotel Component(s), Flagstone shall provide a
Construction Bond to the City for the full amount of the construction cost of any
such Hotel Component(s).
VI. ADDITIONAL AGREEMENTS CONCERNING FLAGSTONE FORFEITURE /
CITY TERMINATION RIGHTS.
(a) If the Marina Component does not Start Construction by 9/01/2013 or both the
Parking/Retail Components do not Start Construction by 9/01/2016, then
Flagstone's rights to build any Components expires and ceases, the Agreement to
Enter is terminated, City retains all Prepaid Construction/Base Rent (as
consideration for the extension of time until 9/1/2013 for the Marina Component
and as consideration for the extension of time until 9/1/2016 for both the
Parking/Retail Components) and Flagstone must turn over to the City
immediately the applicable Ground Lease(s), Flagstone also agrees to waive its
defenses as to failure to begin construction against the City,immediately vacate
and turn over to the City for the City's possession all of Flagstone's rights and
interests in the Property and the easement areas, remove from such easement
areas and from the Property all of its property of whatever kind as requested in
writing by the City Manager, and immediately (i) return or sign over, as
applicable, to the City all of Flagstone's rights, directly or indirectly, in the
permits, plans, specifications, and all related governmental approvals, documents,
instruments, and agreements as necessary related to the Property, and (ii) deliver
to the City all of such permits, plans, specifications, and all related governmental
approvals, documents, instruments, and agreements which are in Flagstone's
possession or in Flagstone's control.
(b) If any. Hotel Component does not Start Construction according to the applicable
deadline under the construction schedule and the Option schedule(s) (as
applicable), then Flagstone's rights to build the applicable Hotel Component
expires (but Flagstone's obligations under the payment schedule for the Marina
Component, the Parking/Retail. Component, and any Hotel Component that is/are
complying continues to the end of the applicable Ground Lease(s)). Any time
Flagstone loses the right to construct a Hotel(s) Component, then Flagstone must
turn over to the City immediately the applicable Ground Lease(s), Flagstone also
agrees to waive its defenses as to failure to begin construction against the City,
immediately vacate and turn over to the City for the City's possession all of
Flagstone's rights and interests in the applicable Hotel Component, any Hotel
Ground Lease, and the related easement areas, remove from such easement areas
and from the Property all of its property of whatever kind as requested in writing
by the City Manager, and immediately (i) return or sign over, as applicable, to the
City all of Flagstone's rights, directly or indirectly, in the permits, plans,
11
specifications, and all related governmental approvals, documents, instruments,
and agreements as necessary related to the applicable Hotel Component, and (ii)
deliver to the City all of such permits, plans, specifications, and all related
governmental approvals, documents, instruments, and agreements which are in
Flagstone's possession or in Flagstone's control.
(c) Subject to Section VII(a), Flagstone may separately ground lease and separately
construct the Marina Component prior to 9/1/2013 if the conditions precedent for
the Marina Component are met
(d) If construction is continuing during the Option period(s), then Flagstone shall pay
both, Construction Rent or Base Rent in accordance with the General Rent
Schedule in Section II above,. and the applicable Option payments related to its
choice to construct either one or two Hotel Components.
VII. CROSS DEFAULTS: SEPARATE DEFAULTS.
(a) During the period prior to the earlier of 96 months from 9/01/2010 (being
8/31/2018) or the date upon which the first Hotel is Open for Business, Ground
Leases for the separate Major Project Components shall be cross -defaulted for
any Base Rent payment defaults, Prepaid Construction/Base Rent payment
defaults, and any Construction Rent payment defaults.
(b) After the earlier of 96 months from 9/01/2010 (being 8/31/2018) or the date upon
which the first Hotel is Open for Business, (i) the Base Rent, Percentage Rent, .
and all other payments to the City each year thereafter shall be apportioned to
each separate Major. Project Component Ground Lease for direct payments to the
City by each separate Ground Lease lessee in an amount reflecting each separate
Major Project Component's respective percentage share of the total Project
Development Costs to that point in time, and (ii) the Ground Leases for the
separate Major Project Components shall not be cross -defaulted for any defaults,
including but not limited to any defaults in payments of Base Rent, Prepaid
Construction Rent/Base Rent, Construction Rent, Percentage Rent, or any other
Rent, with each separate lessee being solely responsible for any payment
default(s) to the City.
Notwithstanding anything to the contrary in this Exhibit A, if the Retail/Parking
Components do not Commence Construction by the 72nd month from 9/01/2010
(being 8/31/2016), then (i) there will be no crediting of Prepaid Construction/Base
Rent, the City shall keep all Prepaid Construction/Base Rent received, (ii) the City
can terminate the Agreement to Enter, all Ground Lease(s), and (iii) the City can
take back the Marina Component, the Retail/Parking Components, any Hotel
Components and the balance of the Project and the Property.,
VIII. STATE WAIVER.
(c)
Upon approval of this Exhibit A by City Commission Resolution, the City will have
forty-five (45) days to perform due diligence on the State Partial Waiver of Deed Restriction (the
12
"State Waiver"). If the State conditions approval in any manner unacceptable to the City, and
the City advises Flagstone that it intends to teilninate due to such unacceptable conditions, then
the City must send notice of such State action to Flagstone within such forty-five (45) days.
Upon receipt of such notice, Flagstone will have thirty (30) days to resolve the dispute
satisfactorily. If the dispute concerning such unacceptable conditions is not resolved, then the
City, may cancel the current Agreement to Enter Into Ground Lease without executing a new
Amended and Restated Agreement to Enter Into Ground Lease. The parties intend to execute the
Agreement to Enter at such time as the State Waiver is executed and delivered and recorded:
IX. IN'DEMNIIICATION/HOLD HARMLESS FOR CITY: DISCHARGE OF
EXISTING L U{-NS. JUDGMENTS, AND GARNISHMENTS.
The City Commission in connection with Resolution No. 10-0144 of March 25, 2010
directed, and Flagstone agreed (a) that Flagstone will enter into a Hold Harmless,
Indemnification, and Security Agreement (the "Hold Harmless, Indemnification, and Security
Agreement") within thirty (30) days of the City's determination in Section X below to proceed
under the new State Waiver, protecting the City against any and all lawsuits and related costs, (b)
that Flagstone shall assist the City in defending against any and all. lawsuits involving liens,
judgments, garnishments and any other matters against Flagstone related to the Property and the
easement areas, (c) to the extent any lawsuit is pending against the City relating to any lien(s) on
the subject Property, that Flagstone shall provide to the City not less than $200,000 in security
in such foinn(s) as satisfactory to the City Manager at such time as the patties enter into the Hold
Harmless, Indemnification and Security Agreement, and (d) Flagstone shall provide to the City
Manager audited financial statements as soon as the same are completed, and any other
infoLnlation needed in connection with the Hold Harmless, Indemnification and. Security
Agreement. Additionally, Flagstone shall have up to one hundred and twenty (120) days from the
date of City Commission approval of the .Amended and Restated Agreement to Enter Into
Ground Lease (the "City Comrnission Approval Date") to clear and discharge as many liens,
garnishments, and judgrnents as possible, prior to making a deposit with the Miami -Dade County
Clerk of Courts Registry for all remaining outstanding liens, garnishments, and judgments at the
end of that one hundred and twenty (120) day period. Upon the one hundred and twenty first
(121 St) day after the City Commission Approval Date, Flagstone shall deliver to the Miami -Dade
County Clerk.of Courts Registry to be held in an escrow account, an amount not less than the
total remainingoutstanding balance of all liens, garnishments, and judgments not previously
discharged during the one hundred and twenty (120) day period from the City Commission
Approval Date (and update such deposit amount as and if necessary from time to time and at the
time of execution of the Amended and Restated Agreement to Enter into Ground Lease, (and
update such deposit amount as and if necessary at time of execution of the Amended and
Restated Ground Lease). If Flagstone does not provide the foregoing, then the City shall
terminate the existing Agreement to Enter with Flagstone, terminate all easements with
Flagstone, and the City shall not enter into the contemplated new Amended and Restated
Agreement to Enter Into Ground Lease and the Amended and Restated Ground Lease, as
applicable at such time..
13
X. SECURITY DEPOSITS.
The Amended and Restated Agreement to Enter Into Ground Lease and the form of Ground
Lease(s) provide for security deposits in connection with the easement areas, the Pre -paid
Construction Rent/Base Rent, and the Ground Lease(s).
(a) Security for the Easements. Prior to the execution and delivery of the new
Amended and Restated Agreement to Enter by City to Flagstone, Flagstone shall either (a)
deliver the amount of Thirty -Five Thousand and No/100 Dollars ($35,000.00) (the "Easement
Deposit") to Escrow Agent or (b) provide to City, at Flagstone's sole cost and expense, a Letter
of Credit in the amount of Thirty -Five Thousand and No/I00 ($35,000.00) (the "Easement
Security LOC"). Notwithstanding the foregoing, Flagstone shall be permitted to utilize any
combination of cash or Letter of Credit so 'long as the easement deposit equals Thirty -Five
Thousand and No/100 Dollars ($35,000.00) in the aggregate. The Easement Deposit or the
Easement Security LOC, as applicable, shall hereinafter be referred to as the "Easement
Security" and shall provide security for the faithful performance by Flagstone of all of the
provisions of the Easements to be performed or observed by Flagstone.
(b) . Security Deposit for the Construction Rent/Base Rent: Prior to execution of
the new and Amended and Restated Agreement to Enter, Flagstone shall either (a) deliver the
amount equal to one year's Construction Rent/Base Rent to the Escrow Agent, or (b) provide to
City, at Flagstone's sole cost and expense, a Letter of Credit in the amount equal to one year's
Construction Rent/Base Rent as defined herein. Notwithstanding the foregoing, Flagstone shall
be permitted to utilize any combination of cash or Letter of Credit so long as the Security
Deposit for the Pre -Paid Construction Rent/Base Rent equals the amounts defined in the
aggregate. The Security Deposit for the Construction Rent/Base Rent, shall herein after be
referred to as the "Security Rent Deposit" and shall provide security for the faithful
performance by Flagstone of all rent payment provisions of this Agreement to be performed or
observed by Flagstone. During the periods outlined below, Flagstone shall deliver the Security
Rent Deposits as . defined below:
Commencing
Annual Amount Required for Rent
Security Deposit
October 1, 2010
$300,000
Octoberl, 2011
$500,000 .
October 1, 2012
$750,000
October 1, 2013
$1,000,000
October 1, 2014
$1,000,000
Octoberl, 2015
$1,000,000
14
October 1, 2016
S1,500,000
October 1, 201.7
$1,675,000
Octoberl, 2018
$2,000,000
Any LOC Deposit held by the Lessor or Cash Deposit held by Escrow Agent, as defined in the
Agreement to Enter between the Parties (having an effective date of February 1, 2010) as
security under such Agreement to Enter into Ground Lease to begin being deposited as of
October 1, 2010 may be credited toward the following year's Security Rent Deposit. The annual
amount due -on September 1, 2018 of $2,000,000 shall remain in effect for the life of the
Agreement to Enter and of the Ground Lease(s), in accordance with the schedule listed in this
section and in Section 5.2 of the Agreement to Enter. If an Event of Lessee's Default for non-
payment of rent occurs hereunder, Lessor may, at its option and without prejudice to any other
right .or remedy that Lessor may have hereunder, apply or require distribution of all or any
portion of the Security Rent Deposit for the payment of any sum to which Lessor may become
entitled by reason of such Event of Lessee's Default, including, without limitation, reasonable
attorneys' fees and costs which Lessor may incur in connection therewith. If Lessor so applies
or requires the distribution to Lessor of all or any portion of the Security Rent Deposit, Lessee
shall, within thirty (30) days after written demand therefor, deposit cash with Lessor in an
amount .sufficient to restore any such deficiency or amend or replace any LOC Deposit,
whichever is applicable, to the full amount, thereof, and Lessee's failure to . do so shall, at
Lessor's option, constitute an Event of Lessee's Default hereunder. In the event Lessor applies
or requires distribution of all or any portion of an LOC Deposit where no Event of Lessee's
Default then existed, Lessor shall be deemed to have improperly requested and received such.
application or distribution, and Lessee shall be entitled to recover from Lessor the amount which
was improperly requested and received, or to reduce the Rent Security Deposit by an equivalent
amount.
XI. LABOR PEACE AGREEMENTS.
The parties acknowledge that the City Commission by Resolution No. 10-0144, adopted on
March 25, 2010, has directed that the Project is subject to the provisions of earlier City
Commission Resolution No. 09-0263, adopted May 28, 2009, regarding the establishment of
labor peace agreements prior to and during the operation of hospitality operations on the
Property.
KIT. COVENANT OF GOOD FAITH AND FAIR DEALING.
All matters in this Exhibit A contain a covenant of good faith and fair dealing by Flagstone and
the City in reasonably complying with their respective obligations.
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15