HomeMy WebLinkAboutExhibit 1 07/12/12Jungle 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 al] 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
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' 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. 0nor before June 28, 2012, the City Commission and the jungle Island Group
approve this Term Sheet; and
1.3. 0n 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. 0n 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. 0n 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
0n 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
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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 theAmended
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 {Needs ;to.' be
described by the Jungle Islandl croup); and
4T4. ' 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
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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 obligation's 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':
S_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.
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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.
• Page 5 of 5
Document No.: 321007
.EXHIBIT A
EXHIBIT B
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is made as of the _day of , 2012, by and
among the City of Miami, Florida, a municipal corporation of the State of Florida ("City") and Parrot
Jungle & Gardens of Watson Island, Inc.("Watson"), a Florida corporation and
("Escrow Agent"). Terms and conditions referred to in this Agreement are from
the Jungle Island Memorandum of Key Lease Amendment Terms and Conditions Precedent, dated
, 2012 ("Memorandum") between the City and Watson
1.0 As a condition of consideration by the City, for a debt'and relationshiprestructure between the
City and Watson, Watson, agrees to deposit by July 10, 2012, cash with Escrow Agent in an
amount equal to the August 1, 2012 payment of the HUD loan or $2,031,747.00, whichever is
greater; plus any delinquent amounts due and owing to Miami -Dade County as a result of non-
payment towards the February 1, 2012 payment.
2.0 In accordance with Section 2 of the Memorandum, funds held in escrow shall be released to the
City without further consideration by the Escrow Agent.
3.0 As the escrow fund is set up in consideration for actions to be taken by the City in lieu of
exercising its rights pursuant to any terms and conditions available within other agreements
executed between the City and Watson, the escrow fund shall not be subject to any disputes or
disagreements. Watson waives any rights to funds on deposit with the Escrow Agent.
4.0 Termination of this Agreement is effective upon compliance of escrow provisions set forth herein.
EXHIBIT C
DEFINITION OF GROSS RECEIPTS
1.0 Gross receipts, whether in cash, on credit, or lay -away, whether collected or not, shall be
accounted for on an accrual basis in accordance with generally accepted accounting principles,
GAAP. The term gross receipts shall have the meaning ascribed herein with respect to all activities
thereon, attached to or within the leasehold footprint. Gross receipts shall mean all amounts,
including but not limited to, receipts, revenues, income from whatever source derived, rents,
commissions, interest earnings, barter, trade, in -kind complimentary donation values, licenses,
concessionaires, use of assets or intangible assets, and proceeds of sale of every kind or nature,
without subtracting any costs or expenses. Such gross receipts may be derived directly, indirectly
or attributable to .any operation, products, services, memberships and vending or mechanical
machines provided by, or among, the lessee or its component parts, sub -tenants, subsidiaries,
principals, investors and related parties affiliated with lessee. And such gross receipts may be the
result of a singular or series of contemplated or consummated transaction(s) for, including but not
limited to amusements, attractions, sports or special events, hotels, marina, gaming, retail,
commercial and parking activities associated with lessee within each annual accounting period.
2.0 Gross receipts includes proceeds from any business interruption or loss of income from business
income or use and occupancy insurance, surety, guaranty, warranty or recovered in any legal
action or proceeding or settlement thereof. Gross receipts includes any escheated, unclaimed or
deposits not refunded.
3.0 Gross receipts excludes all taxes required by law to be collected including real and personal
property taxes, sales tax, convention development tax, tourist development tax, special
assessments, public service taxes and parking surtax; tips and gratuities collected but only to the
extent such amounts are actually paid to employees; common area and maintenance charges and
insurance premiums but only to the extent of the actual costs thereof paid by the lessee; and
returns to shippers and manufacturers for credit.
4.0 Any contemplated time share rentals and sales will require prior approval of lessor with agreed upon
sales price and terms to be included in the definition of gross receipts.
Exhibit D
As stipulated under section 3 (Adjustmentto 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 CO by Jungle .Island Group, within 30 days of receipt of -said
appraisal.
Japanese Garden — The greater of $21,487 per annum payablemonthly in the amount of $1;790.63, plus
all applicable sales tax or the amount stipulated by an appraisal completed, at the Highest andBest 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 per annum 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 n� 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 .andlor 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 andfor Miami -Dade County the next business day.
ATTEST: PARROT JUNGLE AND GARDENS 'OF
• WATSON ISLAND, INC
By.:
By:
President
A 1 1 EST: RIG WATSON, L.L.0
By: By:
Doc 319191
Manager
ATTEST:
L.L.C.
THEME PARK ENTERTAINMENT,
Bv: By:
Doc 319191
Manager
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. .
PARRQT -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: By:
President
ATTEST: •PJG WATSON, L.L:C
By:
BY:
Manager
AI "LEST: THEME PARK ENTERTAINMENT, L.L.C.
By.: By:
319607
:Manager