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HomeMy WebLinkAboutMemo - Approval of Settlement AgmtDate: March 15, 2013 To: Board of Commissioners of the Southeast Overtown/Park West Community Redevelopment Agency From: Clarence E. Woods III, Executive Director Subject: Approval of the Settlement Agreement with the City of Miami and Miami -Dade County to resolve the reverter litigation with Miami -Dade County and Dismiss With Prejudice the Case of City of Miami et al v. Miami -Dade County, Case NO. 07-46851 CA 31 filed by the City of Miami and the Southeast Overtown/Park West Community Redevelopment Agency Recommendation It is recommended that the Board of Commissioners adopt the accompanying resolution approving the Settlement Agreement (the "Settlement Agreement") between the City of Miami (the "City"), the Southeast Overtown/Park West Community Redevelopment Agency (the "CRA") and Miami -Dade County, Florida (the "County") which will resolve a long outstanding dispute between the CRA, the City and the County regarding the reversion of certain properties located in Block 36, PB "B" at Page 34 and Blocks 45 and 56, PB "B" at 41 (collectively, the "Reverter Property") for failure of the City and the CRA to cause the Reverter Property to be developed within the agreed time frame. The Settlement Agreement will result in the dismissal with prejudice of the case filed by the City and the CRA against the County styled City of Miami et al. v. Miami -Dade County, Case No 07-46851 CA 31 (the "Pending Litigation") which was filed by the City and the CRA to contest the claim by the County that title to the Reverter Property had reverted to the County. The settlement will allow the CRA to issue development opportunities for the selection of a developer to develop Blocks 45 and 56 and allow Lyric Place, Ltd., an affiliate of the Gatehouse Group, which was selected through a request for proposal issued in 2007 to proceed with the development of Block 36 in accordance with the terms of the Development Agreement previously approved by the Board of Commissioners of the CRA. Background In July 2003, the City and County entered into a settlement agreement concerning the. Reverter Property, Circuit Court Case No. 2001-13810 CA-08. Based on a settlement in that case, the City and CRA executed and delivered quit claim deeds conveying the Reverter Property to the County that would be held in escrow by the County's General Services Administration for a period of four years, beginning August 1, 2003, and would not be recorded unless the City or CRA failed to cause construction to commence for the Board of Commissioners of the Southeast Overtown/Park West Community Redevelopment Agency Page 2 development on the Reverter Property by August 1, 2007. The County authorized the extension of the reverter date to December 31, 2007. On January 2, 2008, the County filed the escrowed quit claim deeds. The CRA and the City claim that the County wrongfully recorded the quit claim deeds and that the County had delayed the development of the Reverter Property by not responding to the CRA's request to approve the Crosswinds transaction. The City and the CRA filed a lawsuit against the County styled, City of Miami et al. v. Miami -Dade County, Case No 07-46851 CA 31, asserting ownership of the Reverter Property in the CRA. The Court in this matter issued an injunction prohibiting development on the Reverter Property by the City, the County, or the CRA, pending resolution of the case. This item seeks to settle that lawsuit, and in doing so, allows development of the Reverter Property to commence. On July 21, 2009, the County approved amendments to the CRA's Redevelopment Plan to expand the Redevelopment Area and extend the life of the CRA until March 31, 2030. Along with approval of the updated Plan, a 2nd Amendment to the Interlocal Cooperation Agreement (the "Amendment") was approved. The Amendment required, among other things, that this lawsuit be dismissed with prejudice upon the County's approval of, a development plan for the Reverter Property. In April 2010, the CRA submitted a development plan pursuant to the Amendment; however, the County did not approve the plan for lack of sufficient detail. County, City and CRA officials subsequently met:_to discuss the issues and development of the Reverter Property and have negotiated the attached Settlement Agreement. The significant highlights of the proposed Settlement Agreement are, but are not limited to, the following: • Conveyance by the County and the City to the CRA of all title and interest in the Reverter Property, immediately followed by the CRA issuing a development opportunity to select a developer to develop the Blocks 45 and 56 in accordance with minimum requirements for development as set forth in the Settlement Agreement and the Declaration of Restrictions (the "Declaration") between the CRA and the County which is an exhibit to the Settlement Agreement. Block 36 will be developed by Lyric Place, Ltd., pursuant to the Development Agreement previously negotiated and executed by the CRA and Lyric Place, Ltd. Block 36 will be developed pursuant to the terms of the Block 36 Declaration of Restrictions (the "Block 36 Declaration") between the CRA and the County which is an exhibit to the Settlement Agreement. The Reverter Property will be conveyed by the CRA to the selected developers prior to commencement of construction. • Preservation of the history and character of the Overtown community, while incorporating the theme of "Live, Work and Play," to the fullest extent possible. • Development on Blocks 45 and 56 of a Retail Component with a minimum of 150,000 square feet of retail, office, hotel and/or permitted institutional space with the minimum of structural parking spaces required by law to accommodate the Board of Commissioners of the Southeast Overtown/Park West Community Redevelopment Agency Page 3 development on Blocks 45 and 56, and development on Block 36 of a minimum of 30,000 square feet of retail, office, hotel component and/or permitted institutional component, plus a parking garage containing approximately 300 parking spaces on Block 36 (the "Parking Component"). • Development on blocks 45 and 56 of a minimum of 60 affordable housing units (the "Residential Component"), of which ten percent will be available for families earning 30 percent or less of the area median income (AMI), 70 percent will be made available for families earning between 30 and 80 percent of AMI, and the remaining 20 percent will be made available for families earning between 80 and 140 percent of AMI. • The CRA will be responsible for constructing an additional 100 residential units with the Redevelopment Area with respect to those projects that are contemplated in connection with the CRA Bond Issue. • Requires information regarding job opportunities for local area residents and businesses to allow them to participate in the construction of the development, including at least two local job fairs prior to the commencement of each development phase. • Requires information regarding job opportunities for local area residents and local businesses post -construction, including newly generated trade and service related jobs, including at least one job fair upon completion of each development phase. • Authorizes the CRA Executive Director to modify the Declaration by up to 10 percent with respect to the square footage in the Retail Component and the number of units in the Residential Component, but not the percentage allocations of housing units by AMI, and make other modifications without further County approval. • Provides for enforcement by the County of the provisions of the Declaration and the Settlement Agreement by motion filed with the Court in the event of non- compliance or reverter. • The Board of County Commissioners would be required to approve any proposed Developers selected by the CRA within 45 days of notice by the CRA, in order for the Developer to be selected. Failure to respond shall constitute approval. Since the CRA previously selected Lyric Place, Ltd. an affiliate of Gatehouse Group, LLC through a request for proposal process, no County approval shall be required for Lyric Place, Ltd. with respect to Block 36. The time frames for the development are as follows: Blocks 45 and 56 Board of Commissioners of the Southeast Overtown/Park West Community Redevelopment Agency Page 4 • Obtain all land use and zoning approvals for both the Retail and Residential Components within 2 years from the recording of the Declaration. • Commence vertical construction within 3 years of recording of the Declaration. • • Substantially complete construction of the Retail and Residential Components within 2 years of commencement of vertical construction. • The CRA Executive Director will have the ability to modify the time frames of the development, square footage of the Retail Component and number of units of the Residential Component by no more than 10 percent without and County approval. • The Declaration provides for a Default Notice if the developer fails to obtain all land use and zoning approvals or fails to substantially complete the Retail Component and Residential Component within their respective timeframes. In either instance, the developer may extend the approval or respective completion dates by 6 months by paying $250,000 to each the CRA and County. Block 36 • Obtain all land use and zoning approvals for the Retail Component and Parking Component within 1 year from the recording of the Block 36 Declaration. • Commence vertical construction within 2 years from recording of the Block 36 Declaration. • Substantially complete construction of the Retail and Parking Components within 2 years of commencement of vertical construction. The Parking Component will be owned by the CRA. • The CRA Executive Director will have the ability to modify the time frames of the development of the square footage of the Retail Component and the number .of parking spaces included in the Parking Component by no more than 10 percent without further County approval. • The Block 36 Declaration provides for a Default Notice if the developer fails to obtain all land use and zoning approvals or fails to substantially complete.. the Retail Component and Parking Component within their respective timeframes. In either instance, the developer may extend the approval or respective completion dates by 6 months by paying $250,000 to each the CRA and County. Reverter to the County may be exercised by the County if 1) vertical construction is not commenced as set forth above, 2) the CRA attempts to select a developer two times and is unable to select and forward the name of a selected developer to the County (either receives no bids or is unable to select), or 3) the construction is not complete within 6 years (although the portion of Block 36 including the parking garage will not revert if that Board of Commissioners of the Southeast Overtown/Park West Community Redevelopment Agency Page 5 portion is constructed. At all times, the County has the right, in addition to the reverter, to enforce compliance with the Declaration and the Block 36 Declaration. Project Payments Project Payments Blocks 45 and 56. For a period of 25 years after the issuance of a certificate of completion, or its equivalent, for the Retail Component, the Developer will be required to pay to each of the CRA and the County $122,000.00 per year for the first 5 years and thereafter increased by 3% per year; or 2.5% of the Gross Rent, whichever is higher. No payment will be made to the City. Project Payments Block 36. For a period of 25 years after the earlier to occur of (a) 5 years from recording the Block 36 Declaration, or (b) the issuance of a certificate, of completion, or its equivalent, for the Retail Component, the developer will be required to pay to each of the CRA and the County $38,500.00 per year for the first 5 years and thereafter increased by 3% per year; or 2.5% of the Gross Rent, whichever is higher. No payment will be made to the City. #12646348_v4