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HomeMy WebLinkAboutAgenda Item Summary FormAGENDA ITEM SUMMARY FORM File ID: #4103 Date: 05/01/2018 Commission Meeting Date: 06/08/2018 Requesting Department: Department of Real Estate and Asset Management Sponsored By: District Impacted: District 2 Type: Resolution Subject: Direct City Attorney - Jungle Island Charter Amendment Purpose of Item: A Resolution of the Miami City Commission, directing the City Attorney to prepare an amendment to the Charter for consideration at the Referendum Special Election scheduled for August 28, 2018, proposing upon approval of the electorate, to amend Section 29-B of the Charter, entitled "City -Owned Property Sale or Lease — Generally," to authorize the City Commission by a Four —Fifths (4/5ths) affirmative vote, to waive competitive bidding and to authorize the City Manager to execute both the Escrow and the Modification, in substantially the attached form, between the City and ESJ amending certain terms of the existing Lease including, but not limited to, the following material terms: for additional improvements on the 19.35 acres of City owned waterfront property; to modify the current remaining Term of Forty Three (43) years and extend the Term to the year 2099, with an additional option of Fifteen (15) years to extend the Lease to the year 2114; payment of annual rent, once the hotel has stabilized, consisting of the greater of One Million One Hundred Fifty Thousand Dollars ($1,150,000.00) or Five Percent (5.0%) of annual gross revenues from a Fifty Million Dollar ($50,000,000.00) hotel, with a One Hundred Thirty (130) foot maximum height, subject to City design approval and successful zoning changes; provide parking, retail, restaurant and meeting room space; provide improvements, repairs and maintenance of the Ichimura-Miami Japanese Gardens in the amount of Seven Hundred Thousand Dollars ($700,000.00); provide payments totaling Five Hundred Thousand Dollars ($500,000.00) over a Ten (10) year period to be used for the renovation of single family homes in blighted areas of the City; establish a repairs reserve account; implement a Three Percent (3%) transfer fee of gross sale proceeds; and further implement a refinancing fee of One Percent (1 %) of loan proceeds; a rent credit to ESJ in the amount of Five Hundred Thousand Dollars ($500,000.00) to be credited as reimbursements for costs related to shoreline stabilization and improvements needed as a result of erosion from hurricane damage in 2017; with restrictions, reversions, and retention by the City of all other rights. Background of Item: The City of Miami ("City") is the owner of that certain tract of land on Watson Island comprising approximately 19.35 acres and located at 1111 Parrot Jungle Trail, Miami, Florida ("Property"). ESJ JI Leasehold, LLC ("ESJ") and the City are parties to that certain Lease and Development Agreement, as modified from time to time (as so modified, collectively, the "Lease") for the Property. Pursuant to the Lease, ESJ is leasing the Property from the City for the operation of a botanical garden and theme park attraction known as Jungle Island ("Jungle Island"). The Lease was modified pursuant to, inter alia, that certain Third Modification to the Lease and Development Agreement ("Third Modification") and modified the Lease definition for "Additional Improvements" to include a themed hotel and related retail and entertainment, thereby providing ESJ with the potential opportunity to develop and operate a hotel on the Property, subject to approval of the electorate in a citywide referendum, and further subject to the approval of the State of Florida Board of Trustees of the Internal Improvement Trust Fund and any and all applicable laws, codes and regulations. ESJ desires to develop a hotel, parking structure and related improvements (collectively, the "Hotel") on the Property and requires an extension on the term of the Lease, which has approximately Forty Three (43) years remaining, in order to obtain the financing necessary for the construction of the Hotel. The City and ESJ desire to enter into both an Escrow Agreement ("Escrow") and the Fifth Modification ("Modification") to the Lease and Development Agreement ("Lease"), both in substantially the attached form, which will modify the current remaining lease term ("Term") of Forty Three (43) years and extend the Term from the year 2060 to the year 2099 and include a Fifteen (15) year option to extend the Lease to the year 2114; providing rent payment of the greater of One Million One Hundred Fifty Thousand Dollars ($1,150,000.00) or Five Percent (5.0%) of annual gross revenues from a new privately funded hotel development with a minimum cost of Fifty Million Dollars ($50,000,000.00) with a maximum height of One Hundred Thirty (130) feet and a design subject to City approval and successful zoning changes, with said rent being in addition to the currently received greater of annual rent of Five Hundred Two Thousand One Hundred Sixty Eight Dollars ($502,168.00) and percentage rent from Jungle Island revenue; providing parking spaces sufficient to meet zoning code requirements; further providing ancillary improvements consisting of retail, and restaurant space of up to Ten Thousand (10,000) square feet and meeting room space of up to Thirty Thousand (30,000) square feet; with the aggregate payment of Seven Hundred Thousand Dollars ($700,000.00) towards the Ichimura-Miami Japanese Gardens ("Japanese Gardens") for construction of a walkway to Jungle Island, necessary repairs and maintenance of the Japanese Gardens; payments totaling Five Hundred Thousand Dollars ($500,000.00) over a Ten (10) year period to be used for the renovation of single family homes in blighted areas of the City; establishing a reserve account for capital repairs implementing a transfer fee of Three Percent (3%) of gross sales if the Property is transferred or assigned; further implementing a refinancing fee of One Percent (1 %) of the refinancing loan proceeds should the Property be refinanced after the initial refinancing; a rent credit to ESJ in the amount of Five Hundred Thousand Dollars ($500,000.00) to be credited as reimbursements for costs related to shoreline stabilization and improvements needed as a result of erosion from hurricane damage in 2017. Pursuant to the Charter of the City ("Charter") Section 29-B entitled "City Owned Property Sale or Lease -Generally", and Section 3(f)(iii), entitled "Powers", the City has received two (2) independent appraisals affirming the fair market value of the Agreement. The Lease with ESJ will be subject to such other restrictions, reversions, and retention by the City of all other rights. Budget Impact Analysis Item is Related to Revenue Item is NOT funded by Bonds Total Fiscal Impact: N/A Real Estate and Asset Management Aldo Bustamante Office of Management and Budget Office of Management and Budget City Manager's Office Legislative Division City Manager's Office Office of the City Attorney Office of the City Attorney City Commission Legislative Division Office of the City Attorney Office of the City Attorney Office of the Mayor Office of the City Clerk Office of the City Clerk Reviewed B Everton Garvis Christopher M Rose Fernando Casamayor Valentin J Alvarez Nikolas Pascual Barnaby L. Min Victoria Mendez Nicole Ewan Valentin J Alvarez Barnaby L. Min Victoria Mendez Mayor's Office City Clerk's Office City Clerk's Office Department Head Review Budget Analyst Review Budget Review Assistant City Manager Review Legislative Division Review City Manager Review Deputy City Attorney Review Approved Form and Correctness Meeting Legislative Division Review Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Deputy Attorney Review Completed Approved Form and Correctness with Modification(s) Signed by the Mayor Completed Signed and Attested by the City Clerk Completed Rendered Completed 05/01/2018 2:31 PM 05/02/2018 3:55 PM 05/04/2018 12:29 PM 05/14/2018 9:20 AM 05/14/2018 3:50 PM 05/29/2018 11:36 AM 06/01/2018 11:50 AM 06/01/2018 2:58 PM 06/08/2018 10:30 AM 06/08/2018 4:26 PM 06/08/2018 5:05 PM Completed 06/12/2018 10:39 AM 06/12/2018 10:49 AM 06/13/2018 3:16 PM City of Miami Legislation Resolution Enactment Number: R-18-0231 City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com File Number: 4103 Final Action Date:6/8/2018 A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), DIRECTING THE CITY ATTORNEY TO PREPARE A PROPOSED AMENDMENT TO THE CHARTER OF THE CITY OF MIAMI, FLORIDA ("CHARTER") FOR CONSIDERATION AT THE SPECIAL ELECTION SCHEDULED FOR AUGUST 28, 2018 PROPOSING, UPON APPROVAL OF THE ELECTORATE, TO AMEND SECTION 29-B OF THE CHARTER, ENTITLED "CITY -OWNED PROPERTY SALE OR LEASE -GENERALLY," TO AUTHORIZE THE CITY COMMISSION, BY A FOUR -FIFTHS (4/STHS) AFFIRMATIVE VOTE, TO WAIVE COMPETITIVE BIDDING AND AUTHORIZE THE CITY MANAGER TO EXECUTE BOTH AN ESCROW AGREEMENT ("ESCROW') AND THE FIFTH MODIFICATION TO THE LEASE AND DEVELOPMENT AGREEMENT ("FIFTH MODIFICATION") BETWEEN THE CITY OF MIAMI ("CITY") AND ESJ JI LEASEHOLD, LLC ("ESJ") FOR 19.35 ACRES OF CITY -OWNED WATERFRONT PROPERTY, AMENDING CERTAIN TERMS OF THE EXISTING LEASE, INCLUDING BUT NOT LIMITED TO, ADDITIONAL IMPROVEMENTS ON THE PROPERTY; MODIFICATION TO THE CURRENT REMAINING LEASE TERM ("TERM") OF APPROXIMATELY FORTY THREE (43) YEARS AND EXTENDING THE TERM TO 2099 WITH AN ADDITIONAL OPTION OF FIFTEEN (15) YEARS TO EXTEND THE LEASE TO 2114; PAYMENT OF ADDITIONAL ANNUAL RENT OF TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) INCREASING, ONCE THE PROPOSED HOTEL HAS STABILIZED, TO THE GREATER OF ONE MILLION TWO HUNDRED TWENTY THOUSAND DOLLARS ($1,220,000.00) OR FIVE PERCENT (5%) OF ANNUAL HOTEL GROSS REVENUES FROM A FIFTY MILLION DOLLAR ($50,000,000.00) HOTEL, WITH A MAXIMUM OF THREE (300) HUNDRED ROOMS AND ONE HUNDRED THIRTY (130) FOOT HEIGHT, AT ESJ'S EXPENSE AND OPTION, SUBJECT TO CITY APPROVALS AND SUCCESSFUL LAND USE AND ZONING CHANGES, AS NECESSARY; PROVIDING PARKING, RETAIL/RESTAURANT, AND MEETING ROOM SPACE; PROVIDING IMPROVEMENTS, REPAIRS, AND MAINTENANCE TO THE ICHIMURA-MIAMI JAPANESE GARDENS IN THE AMOUNT OF SEVEN HUNDRED THOUSAND DOLLARS ($700,000.00); PROVIDING A CONTRIBUTION OF SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($750,000.00), PAID OVER A TEN (10) YEAR PERIOD, FOR AFFORDABLE HOUSING; ESTABLISHING A REPAIRS RESERVE ACCOUNT; IMPLEMENTING A THREE PERCENT (3%) TRANSFER FEE OF GROSS SALE PROCEEDS; IMPLEMENTING A REFINANCING FEE OF ONE PERCENT (1%) OF LOAN PROCEEDS; PROVIDING A RENT CREDIT TO ESJ IN THE AMOUNT OF FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) FOR REIMBURSEMENT OF COSTS RELATED TO SHORELINE STABILIZATION AND IMPROVEMENTS NEEDED AS A RESULT OF EROSION FROM HURRICANE DAMAGE IN 2017; WITH RESTRICTIONS, REVERSIONS, AND RETENTION BY THE CITY OF ALL OTHER RIGHTS. WHEREAS, the City of Miami ("City") is the owner of that certain tract of land on Watson Island comprising approximately 19.35 acres and located at 1111 Parrot Jungle Trail, Miami, Florida ("Property"); and WHEREAS, ESJ JI Leasehold, LLC ("ESJ") and the City are parties to that certain Lease and Development Agreement, as modified from time to time (collectively, "Lease") for the Property; and WHEREAS, pursuant to the Lease, ESJ is leasing the Property from the City for the operation of a botanical garden and theme park attraction known as Jungle Island ("Jungle Island"); and WHEREAS, the Lease was modified pursuant to a Third Modification to the Lease and Development Agreement ("Third Modification") which modified the Lease definition for "Additional Improvements" to possibly include a themed hotel and related retail and entertainment, thereby providing ESJ with the potential opportunity to develop and operate a hotel on the Property, subject to approval of the electorate in a City-wide referendum and further subject to the approval of the State of Florida Board of Trustees of the Internal Improvement Trust Fund and any and all applicable laws, codes, and regulations, including but not limited to, the City's Zoning Ordinance; and WHEREAS, ESJ desires to develop a hotel, parking structure, and related improvements (collectively, "Hotel") on the Property and requires an extension on the term of the Lease, which has approximately forty-three (43) years remaining, to obtain the financing necessary for the construction of the Hotel; and WHEREAS, the City and ESJ desire to enter into both an Escrow Agreement ("Escrow") and a Fifth Modification to the Lease and Development Agreement ("Fifth Modification"), both in substantially the attached form, which will modify the current remaining lease term ("Term") of approximately forty three (43) years and extend the Term from the year 2060 to the year 2099 and include a fifteen (15) year option to extend the Lease to the year 2114; providing additional annual rent payment of Two Hundred Fifty Thousand Dollars ($250,000.00) and, once the Hotel has stabilized, increasing to the greater of One Million Two Hundred Twenty Thousand Dollars ($1,220,000.00) or Five Percent (5%) of annual gross revenues from the Hotel with a minimum cost of Fifty Million Dollars ($50,000,000.00), with a maximum of Three Hundred (300) rooms and a height of one hundred thirty (130) feet, at ESJ's expense and option, and a design subject to City approval and successful land use and zoning changes, as necessary, with said rent being in addition to the currently received rent; providing parking spaces sufficient to meet zoning ordinance requirements; further providing ancillary improvements consisting of retail and/or restaurant space of up to ten thousand (10,000) square feet and meeting room space of up to thirty thousand (30,000) square feet; with the aggregate payment of Seven Hundred Thousand Dollars ($700,000.00) towards the Ichimura-Miami Japanese Gardens ("Japanese Gardens") for construction of a walkway to Jungle Island, necessary repairs, and maintenance of the Japanese Gardens; payments totaling Seven Hundred Fifty Thousand Dollars ($750,000.00) over a ten (10) year period to be used for affordable housing; establishing a reserve account for capital repairs of Two Hundred Thousand Dollars ($200,000.00) per year; implementing a transfer fee of Three Percent (3%) of gross sales proceeds if the Property is transferred or assigned; implementing a refinancing fee of One Percent (1 %) of the refinancing loan proceeds if the Property is refinanced after the initial refinancing; providing a rent credit to ESJ in the amount of Five Hundred Thousand Dollars ($500,000.00) to be credited as reimbursements for costs related to shoreline stabilization and improvements needed as a result of erosion from hurricane damage in 2017; and WHEREAS, pursuant to Section 3(f)(iii) of the Charter of the City of Miami, Florida, as amended ("Charter"), entitled "Powers," and Section 29-B of the Charter, entitled "City Owned Property Sale or Lease -Generally," the City needs two (2) independent appraisals affirming the fair market value of the Hotel as reflected in the Fifth Modification; and WHEREAS, the Lease with ESJ will be subject to such other restrictions, reversions, and retention by the City of all other rights; and WHEREAS, regardless of the referendum result, ESJ shall pay the following: One Hundred Thousand Dollars ($100,000.00) to the City immediately thereafter the referendum results; and, Thirty Five Thousand Dollars ($35,000.00) to the Liberty City Community Revitalization Trust per year for the duration of the Lease commencing January 1st, 2021; and WHEREAS, upon referendum approval by the City's residents, ESJ shall: establish a special restricted affordable housing account in the amount of Six Hundred Fifty Thousand Dollars ($650,000.00), for payment to the City of Three Hundred Thousand Dollars ($300,000.00) upon issuance to ESJ of any building permit, with payment to the City of the remaining Three Hundred Fifty Thousand Dollars ($350,000.00) upon issuance to ESJ of a TCO for the Hotel; and WHEREAS, ESJ shall provide, pay for, and maintain a dedicated trolley route for Jungle Island, subject to the City's approval of the route's path and stops, commencing January 1st, 2020; 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 Attorney is directed to prepare a proposed amendment to the Charter for consideration at the Special Election scheduled for August 28, 2018 proposing, upon approval of the electorate, to amend Section 29-B of the Charter, entitled "City -Owned Property Sale or Lease -Generally," to authorize the City Commission, by a four -fifths (4/5ths) affirmative vote, to waive competitive bidding and authorize the City Manager to execute both the Escrow and the Fifth Modification between the City and ESJ for the Property, amending certain terms of the existing Lease, including but not limited to, additional improvements on the Property; modification to the Term of approximately forty three (43) years and extending the term to 2099, with an additional option of fifteen (15) years to extend the lease to 2114; payment of additional annual rent of Two Hundred Fifty Thousand Dollars ($250,000.00) increasing, once the Hotel has stabilized, to the greater of One Million Two Hundred Twenty Thousand Dollars ($1,220,000.00) or Five percent (5%) of annual gross revenues from the Hotel, with a maximum of Three Hundred (300) rooms and a one hundred thirty (130) foot height, at ESJ's expense and option, subject to City approvals and successful land use and zoning changes, as necessary; providing parking, retail/restaurant, and meeting room space; providing improvements, repairs, and maintenance to the Japanese Gardens in the amount of Seven Hundred Thousand Dollars ($700,000.00); providing a contribution of Seven Hundred Fifty Thousand Dollars ($750,000.00) paid over a ten (10) year period for affordable housing; establishing a repairs reserve account; implementing a Three Percent (3%) transfer fee of gross sale proceeds; implementing a refinancing fee of One Percent (1 %) of loan proceeds; providing a rent credit to ESJ in the amount of Five Hundred Thousand Dollars ($500,000.00) for reimbursements of costs related to shoreline stabilization and improvements needed as a result of erosion from hurricane damage in 2017; with restrictions, reversions, and retention by the City of all other rights. Section 3. This Resolution shall become effective immediately upon its adoption and signature of the Mayor.' APPROVED AS TO FORM AND CORRECTNESS: ndez, City Attor ey 6/172018 1 If the Mayor does not sign this Resolution, it shall become effective at the end of ten (10) 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.