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HomeMy WebLinkAboutExhibit 1Jungle Island Group Memorandum of Key Lease Amendment Terms and Conditions Precedent This Memorandum of Key Lease Amendment Terms and Conditions Precedent (the "Term Sheet"), dated as of June, _ 2012, summarizes the principal business terms of a restructuring of certain debt obligation by and among the City of Miami, Florida (the "City"), Miami -Dade County, Florida (the "County") and Parrot Jungle & Gardens of Watson Island, Inc., and its guarantor and describes terms that will modify the Lease and Development Agreement dated September 2, 1997 between Parrot Jungle & Gardens of Watson Island, Inc., and the City, as amended (the "Lease Agreement"). Additionally, this Term Sheet describes the obligations of Parrot Jungle and Gardens Watson, LLC and Theme Park Entertainment, LLC, which along with Parrot Jungle & Gardens of Watson Island, Inc., shall be collectively referred to herein as "the Jungle Island Group." RECITALS WHEREAS, on October 1, 2000, Parrot Jungle & Gardens of Watson Island, Inc. took possession of its present location on Watson Island, Miami, Florida under the Lease Agreement; and WHEREAS, pursuant to the Lease Agreement and certain subleases the Jungle Island Group presently occupies its current 18.6134 acre site (the "Property"); and WHEREAS, the Jungle Island Group operates an entertainment facility, containing wandering trails and unusual animals from around the world, three professional and educational wildlife shows performed in exhibit amphitheaters, a cafe, retail outlets and a popular banquet facility known as the Tree Top Ballroom (the "Project"); and WHEREAS, the Jungle Island Group is required to directly employ more than 400 persons and has a significant economic impact on the City and the County in support of the area's tourism industry; and WHEREAS, the County applied to United States Department of Housing and Urban Development ("HUD") for a $25 million Section 108 loan to assist with the funding of the relocation and expansion of the Project from its former location in Pinecrest, Florida to the City of Miami (the "HUD Loan"); and WHEREAS, on August 3, 2007, pursuant to the terms of a Joint Participation Agreement between the City and the County, the City agreed to assume from the County an eighty percent (80%) interest in all of the benefits and obligations possessed by the County under a note payable to the County by the Parrot Jungle & Gardens of Watson Island, Inc., and its guarantors (the "JPA"); and WHEREAS, due to numerous economic factors and conditions, the parties recognize that the debt structure, including but not limited to the HUD Loan, and business relationship by and among Parrot Jungle & Gardens of Watson Island, Inc. the City and the, County needs to be restructured to preserve and grow the jobs at, and economic impact of, the Project; and Page 1 of 5 Document No.: 321007 WHEREAS, on April 4, 2009, the City loaned to Parrot Jungle & Gardens of Watson Island, Inc. $800,000 to facilitate the payment of certain outstanding,property taxes (the "Tax Loan"); and WHEREAS, .the Jungle Island Group with the assistance of third party investors will expand the Project to include a hotel, enhanced retail, additional attractions and requisite parking in order to operate an economically viable enterprise; and WHEREAS, on August 18, 1997, the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida (the "State"), modified certain deed restrictions pertaining to the Property (the "Partial Modification of Restrictions Deed No. 19447") thereby authorizing the use of the Property by Parrot Jungle & Gardens of Watson Island, Inc., as provided for under the Lease Agreement; and WHEREAS, any modification to the Lease Agreement may require further approval by the State (the "State Approval"); and WHEREAS, this Term Sheet sets forth the business terms agreeable to the Jungle Island Group, the guarantors, the City and the County to be approved by the parties under certain definitive documents including an amendment to the Lease Agreement (the "Lease Modification"); and TERM SHEET. 1. SATISFACTION OF THE HUD LOAN and TAX LOAN. Jungle Island Group agrees to pay to the City the remaining balance of the HUD Loan, which is estimated at approximately Fifteen Million, Five Hundred Sixty Thousand Dollars ($15,560,000) and the balance of the Tax Loan, which outstanding balance is estimated at approximately $260,000 (the "HUD/Tax Loan Payoff ") in the manner set forth below; provided that the following Conditions Precedent are satisfied: 1.1. Prior to June 28, 2012 Jungle Island Group has obtained control over additional areas that will be added to the leasehold estate under the Lease Agreement consisting of the MPA Parking Lot and Ramp C, more particularly described in Exhibit "A", and referred to herein as the "Amended Leasehold Footprint"; and 1.2. On or before June 28, 2012, the City Commission and the Jungle Island Group approve this Term Sheet; and 1_3. On or before. September 30, 2012, the County approves the terms outlined herein. that pertain to the County by way of an instrument determined appropriate by the County; and 1.4. On or before July 20, 2012, the City Commission approves the Lease Modification subject only to the referendum approval and State approval consistent with the Lease Modification; and 1_5. On November 6, 2012, the voters approve the referendum authorizing the Lease Modification with all costs associated with the referendum paid by Parrot Jungle & Gardens of Watson Island, Inc.; and 1_6. On or before May 30, 2013, the City has obtained the State Approval,.which shall be deemed to be acceptable to the Jungle Island Group if it is consistent with the Page 2 of 5 Document No.: 321007 Lease Modification, and provided that the Jungle Island Group shall have provided its best efforts in support of the City's efforts to obtain the State Approval; and 1_7. The Jungle Island Group agrees to be responsible for any costs/fees requested by the State in conjunction with the State Approval which may include a percentage of gross revenue, to be paid by the Jungle Island Group in addition to any and all payments due to the City/County; and 1_8. At the time that the State Approval is obtained, no legal proceedings challenging the referendum are pending. . 2. PROOF OF AVAILABLE FUNDS. Jungle Island Group agrees to deposit, on or before July 10, 2012, in escrow Two Million Thirty -One Thousand Seven Hundred and Forty - Seven Dollars and No Cents ($2,031,747.00) due and payable by Parrot Jungle & Gardens of Watson Island, Inc to HUD on August 1, 2012 (the "Escrow Funds"). The• Escrow Funds are to be unconditionally released to the City on August 1, 2012 under the terms and conditions set forth in the Escrow Agreement attached as Exhibit "B". 3. ADJUSTMENT TO RENT. The Lease Modification will include an increase to rent whereby (i) the City receives, in exchange for its portion of all sums outstanding, but not paid by Parrot Jungle & Gardens of Watson Island, Inc., which as of this date is $16,314,372.15 (City's Outstanding Payment Share), on an annual basis an additional 2.5% percentage of all gross receipts (as such term is defined in Exhibit "C") generated by the Jungle Island Group, in addition to the lease payments due under the Lease Agreement; and (ii) as consideration for the Amended Leasehold Footprint, and in the event that Jungle island Group obtains controls of the Yacht Club and The Japanese Gardens, an increase to the minimum rent due under the Lease Agreement in the amounts as set forth in Exhibit "D". 4. REFERENDUM. The City will authorize a referendum to be held during the presently scheduled citywide election on November 6, 2012 asking City voters to approve the Lease Modifications which will include the adjustment to rent described in Section 3 above; and 4_1. Modifying Parrot Jungle and Gardens of Watson Island, Inc.'s lease term to 99 years without options to extend; and 4,2. Including additional property in the leasehold footprint consisting of the Amended Leasehold Footprint and the Yacht Club property, provided that as to the Yacht Club Property, the Jungle Island Group can reach a satisfactory agreement with the Yacht Club prior to June 28, 2012; and 4_3. Authorizing additional attractions and the requisite parking {iNeeds : to. be described by the Jungle Island Group}; and 4.4. Requiring the Jungle Island Group to invest a minimum of $50,000,000 (Fifty Million Dollars) in capital improvements, with a restricted capital reserve account to be replenished with a minimum of $5 million every ten (10) years prorated annually. If the Referendum passes Page 3 of 5 Document No.: 321007 4_5. The Jungle Island Group agrees to bear all costs incurred by the City, including attorneys' fees, in defense of any challenges to the subject matter or process of the referendum; and 4,6.The Jungle Island Group, by entering into this Term Sheet agrees that it will pay/repay any and all grants and bond amounts that have been used on any properties that become part of the leasehold estate, including the Amended Leasehold Footprint; and 4_7. Within 10 business days of the State Approval, Jungle & Gardens of Watson Island, Inc. shall remit to the City the HUD/Tax Loan Payoff plus accrued interest from August 1, 2012 at the interest rate charged to the County under the HUD loan as most recently refinanced to fully defease the HUD Loan (including any and all interest and penalty payments). The remittance of the said payment to the City shall satisfy Jungle & Gardens of Watson Island, Inc.'s obligations under the HUD Loan and the Property Tax Loan. The City shall immediately remit to the County that portion necessary to satisfy the HUD Loan; and 5. ADDITIONAL CONDITIONS 5.1. Concurrently with the execution of this Term Sheet, the Jungle Island Group, and its guarantors will execute the Reaffirmation of Debt attached as Exhibit "E". 5.2. Concurrently with the execution of this Term Sheet, the Jungle Island Group will execute the General Release of all Claims known and unknown to the City of Miami and Miami -Dade County through the date of the execution and final approval by all parties of this Term Sheet attached as Exhibit "F". 5_3. Parrot Jungle & Gardens of Watson Island, Inc. shall enter into a separate agreement with the County whereby the County shall receive, in exchange for its portion of all sums outstanding, . but not paid by Parrot Jungle & Gardens of Watson Island, Inc. to. the County, which as of this date is $11,286,757.85 (County's Outstanding Payment Share), on an annual basis 1.5% of all Gross Receipts generated by the Jungle Island Group. 5.4. The Jungle Island Group shall continue to strictly perform all the terms and conditions in accordance with the Lease Agreement and continue to make any and all payments that become due and payable to the City or the County in accordance with the Lease Agreement or the HUD Loan or the Tax Loan. 5_5. The. Jungle Island Group acknowledges that any modification to the Project may require zoning and other land use approvals .and the City makes no representations or commitment that any such approvals will be granted. 5_6. Wherever in this Term Sheet an obligation calls for payment or performance from the Jungle Island Group, that obligation is the obligation of Parrot Jungle and .Gardens of Watson Island, Inc., Parrot Jungle and Gardens Watson, LLC, and Theme Park Entertainment, LLC jointly and severally. Each of those entities is fully responsible for each obligation and the City of Miami may collect or seek performance in full or in part from each of those entities. Page 4 of 5 Document No.: 321007 Jungle & Gardens of Watson Island, Inc., Parrot Jungle and Gardens Watson, LLC Theme Park Entertainment, LLC, Guarantor MIAMI-DADE COUNTY, FLORIDA APPROVED AS TO FORM AND CITY OF MIAMI, FLORIDA CORRECTNESS: Julie 0. Bru, City Attorney. Johnny L. Martinez, P.E., City Manager ATTEST: Priscilla A. Thompson, City Clerk Page5of5 Document No,: 321007 EXHIBIT A TO BE PROVIDED PRIOR TO EXECUTION EXHIBIT B. TO BE PROVIDED PRIOR TO EXECUTION EXHIBIT C TO BE PROVIDED PRIOR TO EXECUTION Exhibit D As stipulated under section 3 (Adjustment to Rent), minimum base rent will be adjusted in consideration of the Amended Leasehold Footprint. The following areas, as defined in the term sheet, shall have the associated minimum rent during the construction phase. Construction phase is defined as the period where improvements to the additional Attractions, Retail and/or Theme Hotel have not .been completed; Further, the Construction Phase is defined as over/terminated when the stipulated Attractions, Retail and/or Them Hotel are completed and open for business. The Construction Phase cannot last longer than 4 (Four) years. Yacht Club Area — The greater of $159,917 per annum payable monthly in the amount of $13,326.44, plus all applicable sales tax or the amount stipulated by an appraisal completed, at the Highest and Best Use. The appraisal shall be completed by the City within 60 days of Referendum approval. The cost of the .appraisal shall be reimbursed to the City by Jungle Island Group, within 30 days of receipt of said appraisal. Japanese Garden — The greater of $21,487 per annum payable monthly in the amount of $1,790.63, plus all applicable sales tax or the amount stipulated by an appraisal completed, at the Highest and Best Use. The appraisal shall be completed by the City within 60 days of Referendum approval. The cost of the appraisal shall be reimbursed to the City by Jungle Island Group, within 30 days of receipt of said appraisal. MPA Parking Lot and Ramp C — The greater of $96,487.57 perannum payable monthly in the amount of $8,040.63, plus all applicable sales tax or the amount stipulated -by an appraisal completed, at the Highest and Best Use. The appraisal shall be completed by the City within .60 days of Referendum approval. The cost of the appraisal shall be reimbursed to the City by Jungle Island Group, within 30 days of receipt of said appraisal. Once the improvements to any of the additional Attractions,. Retail and/or Theme Hotel have been .completed, than the Rent, for the completed Attraction, Retail and/or Themed Hotel shall be amended as follows. Section D. (iii) of the Third Modification to the Lease and Development Agreement, dated October 29, 2008, shall be amended to read -Rent for the Additional Improvement shall be the Greater of an amount equal to 5% of the Gross Revenue received .by the Tenant, Subtenant or, if operated by .other than the tenant or a Subtenant, the operator of the Attraction, Retail and or Themed Hotel or $62,500 per month. EXHIBIT E REAFFIRMATION OF DEBT 1.. Parrot Jungle and Gardens of Watson Island, Inc., PJG Watson, L.L.C. and Theme Park Entertainment, L.L.C., each acknowledge and reaffirm that payments are due and owing under the Lease, HUD Loan, Miami -Dade County Leasehold Mortgage Note as well as real property taxes and all modifications and deferments thereof entered into in writing pursuant to the attached debt schedule, and that they have no .defense to those obligations or any claims against the City of Miami or Miami -Dade County. 2. Parrot Jungle and.Gardens of Watson Island, Inc., PJG Watson, L.L.C. and Theme Park Entertainment, L.L.C. hereby agree that failure to make payment on the HUD loan will be a default by each under the Lease, Sublease, Subsublease and all modifications and/or amendments thereof .and shall be grounds for termination of the Lease, Sublease, Subsublease and all amendments and/or modifications thereof and that Parrot Jungle and Gardens of Watson Island, Inc., PJG Watson, L.L.C. and Theme Park Entertainment, L.L.C. waive any right they may have to notice or cure and suit may be filed .by the City of Miami and/or Miami -Dade County the next business day. ATTEST: PARROT JUNGLE AND GARDENS OF WATSON ISLAND, INC By.: By.: President ATTEST: PJG WATSON, L.L.0 By: By: Manager Doc 319191 ATTEST: L.L.C. THEME PARK ENTERTAINMENT, By: By: Manager Doc 319191 EXHIBIT F RELEASE AGREEMENT In consideration of the approval of the Term Sheet by the City of Miami Commission, PARROT .JUNGLE AND GARDENS OF WATSON ISLAND, INC., PJG WATSON, L.L.C. AND THEME PARK ENTERTAINMENT, L.L.C. hereby execute and tender the following Release in favor of the City of Miami. PARROT JUNGLE AND GARDENS OF WATSON ISLAND, INC., PJG WATSON, L.L.C. AND THEME PARK ENTERTAINMENT, L.L.C., together with their affiliates, assigns, agents, principals, directors, officers, employees, representatives, attorneys, .insurers, and any and all other persons or entities who 'have at any time acted or purported to act on its behalf (collectively, the "Releasing Parties") .absolutely and forever, release and discharge .the. City of. Miami and Miami -Dade County together with their affiliates, divisions, agencies, associates, predecessors, successors, assigns, agents, principals, directors, officers, partners, employees, representatives, attorneys, insurers, and any and all other persons or entities who have at any time acted or purported to act on its behalf (collectively, the 'Released Parties") from any and. all actions, debts, claims, counterclaims, defenses, demands, liabilities, damages, causes of action, costs, expenses, and compensation of every kind and nature whatsoever, in law or in equity, known or unknown, .suspected or unsuspected, reasonably discoverable or not, present, fixed, or contingent, which the Releasing Parties may have or ever had, or may have or claim to have in the future, from the beginning of time, against the Released Parties, arising .from or relating to the use of property on Watson Island, the lease of property on Watson Island, the operation of their businesses, any loan, note or guarantee, any mortgage of property or chattel or any other claim in tort or contract. ATTEST: PARROT JUNGLE AND GARDENS OF WATSON ISLAND, INC By: ATTEST: By: President PJG WATSON, L.L:C By: By: . Manager ATTEST: THEME 'PARK ENTERTAINMENT, L.L.C. Bv.: By: Manager 319607