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Legislation
Resolution
City Hall
3500 Pan American
Drive
Miami, FL 33133
www.miamigov.com
File Number: 12-00739
Final Action Date:
A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S),
AUTHORIZING THE CITY MANAGER TO EXECUTE THE SECOND AMENDED
AND RESTATED PARTIAL MODIFICATION OF RESTRICTIONS TO DEED NO.
19447-F, IN SUBSTANTIALLY THE ATTACHED FORM IN RELATION TO THE CITY
(THE "SECOND AMENDED AND RESTATED STATE PARTIAL WAIVER") WITH
THE BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST FUND
OF THE STATE OF FLORIDA (THE "BOARD OF TRUSTEES") AND FLAGSTONE
ISLAND GARDENS, LLC ("FLAGSTONE"), SUBJECT TO PRIOR APPROVAL BY
THE BOARD OF TRUSTEES.
WHEREAS, the City of Miami ("City") since 1949 has been the owner of certain real property
located on Watson Island at approximately 1050 MacArthur Causeway, Miami, Florida (the "Property");
and
WHEREAS, pursuant to the City's Charter Section 29-C, the City undertook the required
processes for the City's Mega Yacht Marina and Mixed Use Waterfront Development Request for
Proposal and all addenda thereto (collectively, the "RFP"), for 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 pro.posal (the "Flagstone Proposal") and was
selected as the most qualified responsive and responsible bidder; and
WHEREAS, also as required by the City's Charter Section 29-C, 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 approving requirements of the Project and the
Flagstone Proposal; 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 had certain required conditions precedent 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
City of Miami
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File Number: 12-00739
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 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
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 negotiated and desired to enter into 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 of which
was in conformance with the Referendum and authorized by the City Commission, subject to
subsequent State of Florida required approval, on September 23, 2010 pursuant to Resolution No.
R-10-0402 (the "Authorizing Resolution"), each of which was attached to the Authorizing Resolution
and incorporated thereby, 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 Authorizing Resolution
and Exhibit A thereto; (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 to the Authorizing
Resolution; (4) extending certain milestone dates in the timelines for construction commencement,
completion, and other development matters as set forth in Exhibit A to the Authorizing Resolution; and
(5) providing for security deposit(s); and
WHEREAS, the proposed changes in the Amended and Restated Ground Lease(s) required
approval 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 which
conformed with the Referendum requirements, 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 modified 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
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Records of Dade County, Florida; and
WHEREAS, the Board of Trustees at its August 16, 2011 meeting authorized the execution and
delivery of a new Amended and Restated Partial Modification of Restrictions to Deed No. 19447-F,
which also conformed with the Referendum requirements, with the City and Flagstone (the "Amended
and Restated State Partial Waiver") incorporating the new terms and conditions of Exhibit A, the
Amended and Restate Agreement to Enter, and the Amended and Restated Ground Lease(s), and
required that: (1) in the event that Flagstone and the City contemplate in the future any material
modifications to the Amended and Restated Ground Lease(s) and/or the Amended and Restated
Agreement to Enter; Flagstone and the City must discuss such proposed modifications with the
Division of State Lands, State of Florida Department of Environmental Protection (the "Division"), and
(2) any future material amendments to the Amended and Restated Ground Lease(s) and/or the
Amended and Restated Agreement to Enter must first receive prior approval by the Board of Trustees
at a regularly scheduled meeting; and
WHEREAS, the Authorizing Resolution and Exhibit A thereto also required upon approval by the
Board of Trustees of the Amended and Restated State Partial Waiver, that (1) the City Manager return
to the City Commission for approval of the Amended and Restated State Partial Waiver, and (2)
Flagstone provide a $300,000.00 certified check to the City for time extension Consideration for Use
payments, for the time period from October 1, 2010 through September 30, 2011 as a required
condition precedent to approval of the Amended and Restated State Partial Waiver, which certified
check was provided to the City prior to consideration of this Resolution, and (3) that Flagstone make
certain payments to and undertake certain other requirements of the Board of Trustees in connection
with the Amended and Restated State Partial Waiver; and
WHEREAS, pursuant to Resolution No. 11-0337, adopted September 15, 2011, the City
Commission authorized the City Manager to execute the Amended and Restated State Partial Waiver,
and subsequently City Manager, the Board of Trustees and Flagstone executed the Amended and
Restated State Partial Waiver with an effective date of September 15, 2011; and
WHEREAS, Flagstone has continued to make all required payments to the City and to fulfill its
continuing obligations to the City, and the City and Flagstone have subsequently entered into the
Amended and Restated Agreement to Enter Into Ground Lease, an Escrow Agreement covering
Flagstone's deposit obligations to the City, and an Indemnification Agreement from Flagstone to the
City; and
WHEREAS, subsequently due to a technical default by Flagstone, the Division and the Board of
Trustees determined to revoke and further revise and amend the Amended and Restated State Partial
Waiver in relation to Flagstone, but not in relation to the City; and
WHEREAS, Flagstone is continuing to fulfill its cure requirements to the City under the Amended
and Restated Agreement to Enter Into Ground Lease to correct and to cure Flagstone's technical
default to the Division and the Board of Trustees; and
WHEREAS, the Board of Trustees is scheduled to consider a Second Amended and Restated
State Partial Waiver in relation to Flagstone at the August 7th Board of Trustees meeting, and due to
the City Commission's August recess, Flagstone is requesting that the City Commission consider
authorizing the City Manager to execute a Second Amended and Restated Partial State Waiver that
revises and amends certain provisions regarding Flagstone; but does not change any provisions
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File Number: 12-00739
required by the Referendum and does not change any provisions regarding the City from the earlier
September 15, 2011 Amended and Restated Partial State Waiver (a copy of which is attached and
incorporated).
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.
Section 2. The City. Manager is authorized{1} to execute the Second Amended and Restated
Partial Modification of Restrictions to Deed No. 19447-F, in substantially the attached form in relation
to the City, with the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida
(the "Board of Trustees") and Flagstone Island Gardens, LLC ("Flagstone"), subject to prior approval
of the Board of Trustees.
Section 3. This Resolution shall become effective immediately upon its adoption and signature of
the Mayor.{2}
APPROVED AS TO FORM AND CORRECTNESS:
JULIE O. BRU, CITY ATTORNEY
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.
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