HomeMy WebLinkAboutLetter - HyattNovember 16, 2011
City of Miami
Assistant City Manager - Chief of Infrastructure City of Miami
Riverside Center
444 S.W. 2nd Avenue l0th Floor
Miami, Florida 33130
Attn: AIice N. Bravo, P.E.
Re: Hyatt Regency Miami and James L. Knight Center Convention Center
Replacement of Cooling Tower and Chillers
Dear Ms. Bravo:
Reference is made to that certain Lease and Agreement for Development (the "Lease")
dated September 13, 1979 by and between the City of Miami, as lessor (the "City"), and Miami
Center Associates, Ltd., ("MCA") predecessor -in -interest to Hyatt Equities, L.L.C., as lessee
("Hyatt"), as amended, supplemented and assigned from time to time, and supplemented or
otherwise affected by that certain Operation and Maintenance Agreement ("O&M Agreement")
dated December 12, 1984 by and between the City and MCA. Capitalized terms used herein but
not otherwise defined herein shall have the meanings set forth in the Lease: The parties
expressly agree and stipulate that this Agreement is not an amendment or modification of the
Lease or a rider or addendum to the Lease. The parties expressly reserve their rights, claims, and
remedies as to any disputes, claims or controversies existing between them under the Lease.
For good and valuable consideration hereby acknowledged and received, the City and
Hyatt hereby agree as follows:
1. Cooling Towers and Chillers. The replacement of the cooling tower and chillers
at the Project (the "Cooling Tower/Chiller Work") is necessary for the proper operation and
maintenance of the Project as required by the Lease. The purpose of this letter agreement (this
"Agreement") is to document the agreement of the parties as to (i) how to perform the Cooling
Tower/Chiller Work and (ii) the mechanics of payment of each party's share of the cost of such
work. For the avoidance of doubt, if a party fails to perform its obligations under this Agreement
the other party will have the rights and remedies available to it under the Lease or Florida law or
--in equity. The. City, previously authorized Hyatt to proceed -with the engineering and design for
-the cooling.:tower and:chillers at the Project ("Phase P').. Hyatt paid 100% of the cost of Phase I
_in the .amount of $243,740.90. The cost of Phase I shall be split between the `City and Hyattt,
City of Miami
November 16, 2011
Page 2 of 7
each paying 50% of the total cost pursuant to the terms of the Lease. The City will pay its portion
within the time period provided by Florida's Local Government Prompt Payment Act (the
"Prompt Payment Act") following rendition of a proper invoice under the Prompt Payment Act
for payment of construction services. Such payment time period is twenty five (25) business
days under the Prompt Payment Act (§ 218.735, Fla. Stat.). Hyatt and the City now hereby agree
to proceed with "Phase II" of the Cooling Tower/Chiller Work, which is the purchase and
installation of three centrifugal chillers, a cooling tower, and associated equipment for the Hotel
and Convention Center, in accordance with the following terms and conditions:
(a) Hyatt and the City hereby approve the plans and specifications for Phase II
prepared by Grumman/Butkus Associates Ltd. and Building Consultants Ltd., a description of
which are attached hereto as Exhibit A (the "Plans and Specifications"). The Plans and
Specifications include plans and specifications for "Base Bid A", which relate to the centrifugal
chillers and associated equipment (the "Chiller Plans and Specifications") and "Base Bid B",
which relate to the cooling tower and associated equipment (the "Cooling Tower Plans and
Specifications"). The City agrees to bid out the acquisition of the chillers to qualified providers
in accordance with City bidding procedures and the Chiller Plans and Specifications. The City
also agrees to bid out the installation of the chillers and cooling tower to qualified contractors in
accordance with City bidding procedures and the Plans and Specifications. Hyatt shall have the.
right to approve the bid packages for the acquisition of the chillers and the installation of the
chillers and the cooling tower. Hyatt's approval will not be unreasonably delayed, withheld or
denied. The City shall consult with Hyatt prior to approving any bid submitted to the City that
Hyatt believes in good faith is not responsive to the bid package or that the provider or contractor
is not qualified or lacks the financial .ability to perform, provided that Hyatt will not be able to
"veto" the bid award. Hyatt agrees to bid out the acquisition of the cooling tower to qualified
providers in accordance with the pre -purchase of cooling tower specifications dated June 12,
2009 and reissued on August 29, 2011 (such specifications are attached to the "Base Bid B"
Cooling Tower Plans and Specifications). The City retains the right to disapprove any
bid/contractor submitted to Hyatt if the City believes in good faith that the bid is not in
accordance with the Cooling Tower Plans and Specifications or that the provider lacks the
financial ability to perform. This is in addition to all customary rights of rejection the City has in
its bid documents and City Code, which the City expressly reserves.
(b) The City shall proceed with the purchase and installation of the chillers in
accordance the successful bids. After the City has purchased the chillers (and has evidenced
same to Hyatt), Hyatt shall proceed with the purchase of the cooling tower in accordance with
the successful bid. Although Hyatt will be responsible for purchasing the cooling tower, the City
will cause the contractor selected by the City to install the cooling tower because of the
interconnected nature' of the chillers and the cooling tower as part of the same air conditioning
system. The City shall cause the chiller and cooling tower installation Cooling Tower/Chiller
Work to be performed in a good and workmanlike and lien -free manner in accordance with the
Plans and Specifications and in compliance with all applicable governmental laws, rules,
regulations and industry standards. The parties agree that a statutory performance and payment
'bond will be required of the successful bidder in connection :with .the installation;` of the chiller
and: cooling tower. Thebond shall be in the form prescribed by §255.05, Fla. Stat. The City shall
cause the -purchase of _the chillers and the installation of the chillers and cooling tower to be`
City of Miami .
November 16, 2011
Page 3 of 7.
performed in accordance with a mutually agreed upon schedule (the "Schedule"), provided that
installation of (i) the chillers shall begin on or about January 9, 2012 and be substantially
completed on or about April 9, 2012, 'and (ii) the cooling towers shall begin on or about January
9, 2012 and be substantially completed on or about July 9, 201_2. • The City shall use the same
contractor for the installation of the chillers and the cooling tower. Hyatt and the City shall
reasonably cooperate in connection with the chiller and cooling tower. installation Cooling
Tower/Chiller Work. The City shall cause all installation Cooling Tower/Chiller Work to be
coordinated with Hyatt so as to minimize disruption to the operation of the Hotel. Without
limiting the foregoing, the City shall obtain Hyatt's prior approval of shut downs of power,
water, and HVAC, use of loading docks, blockage of circulation areas, and evacuation of upper.
floor(s) for roof lifts. Hyatt's approvals under this Agreement shall not be unreasonably
withheld, conditioned or delayed. Hyatt shall communicate in writing the name, email, and
phone number of Hyatt's local contact person at the Hyatt Regency Miami Hotel who will be
authorized to act for Hyatt as to all approvals from Hyatt referenced herein. If Hyatt reasonably
determines that temporary cooling for the Project is required during the installation process, the
City shall provide such temporary cooling and Hyatt and the City shall split the cost equally. If
any contractor retained by the City shall fail to comply with the terms and conditions of the
applicable construction agreement, the City shall promptly notify Hyatt. The City and Hyatt
shall promptly thereafter meet to discuss the appropriate course of action with respect to such
defaulting contractor. The City shall not amend the construction agreements or purchase orders
or approve any material change orders relating to the Cooling Tower/Chiller Work without
Hyatt's prior written approval which shall not be unreasonably conditioned, withheld or delayed.
Any construction agreements relating to the Cooling Tower/Chiller Work shall name Hyatt as a
third party beneficiary of such agreement, require the applicable contractor to name Hyatt and
any Hyatt related parties who have an insurable interest designated by Hyatt as . additional
insureds under the liability insurance policies such contractor is required to carry and require
such contractor to indemnify Hyatt in the same manner that such contractor is required to
indemnify the City under such agreement. The City acknowledges that because Hyatt is paying
50% of the costs for the Cooling Tower/Chiller Work, 50% of any liquidated damages payable to
the City under the construction agreements relating to the Cooling Tower/Chiller Work shall be
paid to Hyatt.
(c) The cost of Phase II, which shall include the cost to acquire the chillers
and cooling tower, the installation costs, engineering fees and any other costs reasonably and
directly related to purchase and installation of the chillers and cooling tower (the "Phase 11
Costs"), shall be split between the City and Hyatt, each paying SO% of the total cost. The parties
acknowledge that the Phase II Costs are reasonable out of pocket expenses incurred by the
parties in connection with the Cooling Tower/Chiller Work, and do not include internal costs
incurred by the parties, such as the salaries of City or Hyatt employees. During the course of the
Phase 11 Cooling Tower/Chiller Work, the City shall submit to Hyatt true copies of all invoices it
receives from its contractors, together with all backup provided by the contractor promptly upon
receipt. Provided that the invoice has been approved in accordance with the terms of the
construction agreement governing such work, Hyatt shall_make payment of its_50% share of each
such invoice into a construction-account'established by the. City at;least two business days before
payment. is due. Hyatt. shall : submit to the City true copies of all invoices it receives from. its
c.. provider- of the°cooling-tower, together with all backup promptly upon receipt. Provided that the.
City of Miami
November 16, 2011
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invoice has been 'approved in accordance with the terms of the construction agreement governing
such work, the City shall pay its 50% share at Hyatt's direction to either Hyatt or the contractor
or the vendor, as applicable, within twenty five (25) business days as provided by the Prompt
Payment Act (§ 218.735, Fla. Stat.). If the City fails to pay the amounts owed by the City in a
timely manner, Hyatt shall have the right to pay the amounts owed by the City and pursue any
remedies available to it under the Lease, at law or in equity.
(d) As soon as is practical following the completion of Phase II or upon
Hyatt's written request during the performance of the Cooling Tower/Chiller Work, as the case
may be, the City shall furnish Hyatt with. a statement of the actual costs incurred by the City with
respect to Phase II as of the date of such statement, together with reasonable supporting
documentation (the "City Statement"). The City Statement shall also reflect any payments made
to the City by Hyatt with respect to the Cooling Tower/Chiller Work. As soon as is practical
following the completion of Phase II or upon the City's written request during the performance
of the Cooling Tower/Chiller Work, as the case may be, Hyatt shall furnish the City with a
statement of the actual costs incurred by Hyatt with respect to Phase II as of the date of such
statement, together with reasonable supporting documentation ("Hyatt Statement"; the Hyatt
Statement and the City Statement will be referred to herein as. a "Statement"). The Hyatt
Statement shall also reflect any payments made to Hyatt by the City with respect to the Cooling
Tower/Chiller Work. If a party requests the other party to prepare a Statement, the requesting
party will also be required to prepare a Statement as soon as is practical after making such
request. Within fifteen (15) days after the parties have exchanged Statements, the parties will
meet (either in person or telephonically) to discuss the Statements and resolve any questions or
issues with respect thereto. If a party requests additional information or supporting
documentation, the party receiving such request shall reasonably cooperate with respect to such
request. After receipt of the City's Statement and the preparation of Hyatt's Statement and the
resolution of any issues or questions with respect to such Statements, Hyatt shall deliver to the
City a statement (the "Reconciliation Statement") of the actual costs incurred by both parties
with respect to Phase II and the payments required to be made by Hyatt or the City to the other
party to cause the cost of Phase II to be split equally between the City and Hyatt. The payment
required to be made by either party in connection with the Reconciliation Statement shall be
made within twenty five (25) business days after Hyatt delivers the Reconciliation Statement to
the City, provided that the City will have the right to audit any portion of the Reconciliation
Statement (the portion audited will be referred to herein as the "Audited Costs"), and in such
event (i) the City shall complete such audit within 90 days after receipt of the Reconciliation
Statement and (ii) the City may defer the payment of the Audited Costs for up to ninety (90) days
after receipt of the Reconciliation Statement. If the City has to pay any payment under this
paragraph in excess of $25,000, such payment obligation shall be subject to the prior approval of
the City Commission, who may question Hyatt or others involved as to the matter. For the
avoidance of doubt, the. payment reconciliation described herein may be done on an interim basis
at any time while the Cooling Tower/Chiller Work progresses, in addition to upon completion of
Phase II. The payment reconciliation that will be done upon completion of Phase II shall take
into account any prior payment reconciliations done by the parties. If the City fails to provide
the . City Statement when required, Hyatt shall have the right to submit a Reconciliation.
Statement based on -the ,Hyatt Statement and Hyatt's good faith estimate of the City's costs in
connection with.. the Cooling Tower/Chiller Work, and if .such Reconciliation Statement shows
City of Miami
November 16, 2011
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that the City owes Hyatt any amounts, the City will be obligated to reimburse Hyatt as indicated..
on the Reconciliation Statement (but Hyatt will have no obligation to pay the City any amounts
shown on such estimated Reconciliation Statement until the City delivers the City Statement as
required herein).
(e) Except as provided in (d) above, If the City fails to reimburse Hyatt for the
City's share of the Phase II costs within twenty five (25) business days after the preparation of a
Reconciliation Statement, Hyatt may exercise such legal remedies as are available under Florida
law. If the City does not purchase the chillers or install the chillers and cooling tower in
accordance with the Schedule, the City shall reimburse Hyatt any funds advanced by Hyatt
within twenty five (25) business days of written demand from Hyatt, and Hyatt may, without
limiting any other rights Hyatt may have at law or in equity, proceed with the purchase of the
chillers or the installation of the chillers and cooling tower, as the case may be, on the City's
behalf, and the City shall reimburse Hyatt for its share of the total Phase II costs within twenty
five (25) business days of written demand from Hyatt. If the City fails to reimburse Hyatt for
such costs advanced by Hyatt may exercise such legal remedies as are available under Florida
law or in equity.
(f) The City agrees to reimburse Hyatt for the City's 50% portion of the
Phase I costs within thirty (30) days of the date hereof. Alternatively, at Hyatt's option, Hyatt
may credit the City's portion of the Phase I costs against future payments owed by Hyatt under
this Agreement. If the City fails to pay such amount Hyatt shall have such remedies as are
available under Florida law or in equity.
(g) Hyatt acknowledges that the City is funding all or a portion of its share of
the Cooling Tower/Chiller Work costs with funds provided under the American Recovery and
Reinvestment Act of 2009 ("Recovery Act Funds"). The Recovery Act Funds are to be expended
on the portion of the Cooling Tower/Chiller Work relating to the chillers. Therefore,
notwithstanding the payment procedures set forth in Section 1(c), if required by the requirements
of the Recovery Act Funds, the City shall have the right to pay for all costs relating to the
procurement and installation of the chillers up to the amount of Recovery Act Funds awarded to
the City for the chiller portion of the Cooling Tower/Chiller Work. In such event, the parties
shall utilize the reconciliation process set forth above to ensure that each party ultimately pays
50% of the cost of the Cooling Tower/Chiller Work.
2. City Approvals. The City hereby acknowledges its approval of the work
performed for Phase I, the cost of the Phase I work, Phase II, and the sharing of the respective
costs between Hyatt arid -the City, all as set forth in this Agreement.
3. No Other Changes. The terms of this Agreement shall control in the event of any
conflict in any prior agreements between the parties.
4. Authority. Hyatt and the City hereby covenant and warrant that- they have full
right and authority to enter into this Agreement.
City of Miami
November 16, 2011
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• 5. Successors. This Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto and their respective successors and assigns.,
6. Counterparts. This Agreement may be executed in counterparts and each such
counterpart shall be deemed an original and all of which together shall constitute a single
Agreement. Furthermore, signatures received via facsimile or electronic transmission shall be
deemed to constitute and original signature and shall cause this Agreement to be enforceable
against the party in question.
[SIGNATURE PAGE FOLLOWS]
City of Miami
November 16, 2011
Page 7 of 7
We would appreciate your acknowledgement of the foregoing by signing this, letter, in
duplicate, and returning one fully executed original to us. The other original is for your records.
Thank you.
Very truly yours,
Hyatt Equities, L.L.C.
By:
Its: VteE ?QkSrS�.
Acknowledged and agreed
this day of November, 2011
C. of Miami, 4 municipal corporation of the State of Florida
John Martine, P.E.
Cl MANAG
Attest:
t
Priscilla A. Thompson, CMC, City Clerk
Approved as to legal form and correctness:
Julie O. Bra%
City Attorney
Calvin Ellis, Risk Manager