HomeMy WebLinkAboutExhibit - Fifth Modification SUBSUBSTITUTE ITEM. ORIGINAL
CAN BE SEEN AT THE END OF
THIS DOCUMENT.
FIFTH MODIFICATION TO LEASE AND DEVELOPMENT AGREEMENT
THIS FIFTH MODIFICATION TO LEASE AND DEVELOPMENT AGREEMENT
(this "Modification") is made as of the _ day of , 2018 (the "Effective Date")
by the CITY OF MIAMI, a municipal corporation of the State of Florida ("Lessor" or "City")
and ESJ JI LEASEHOLD, LLC, a Florida limited liability company ("Lessee").
RECITALS:
A. Parrot Jungle and Gardens of Watson Island, Inc., a Florida corporation
f/k/a Parrot Jungle & Gardens, Inc., a Florida corporation ("Parrot Jungle") and the City
entered into that certain Lease and Development Agreement demising to Parrot Jungle
the Subject Property (as defined in the Lease). The Lease and Development Agreement
is dated September 2, 1997 and has been modified by: (i) that certain Modification to
Lease and Development Agreement, dated April 14, 2000, by and between Parrot Jungle
and the City, (ii) that certain Modification to Lease and Development Agreement, dated
August 13, 2002, by and between Parrot Jungle and the City, (iii) that certain Third
Modification to Lease and Development Agreement, dated October 29, 2008, by and
between Parrot Jungle and the City (the "Third Modification"), (iv) that certain Fourth
Modification to Lease and Development Agreement dated, June 24, 2009, by and
between Parrot Jungle and the City, and (v) that certain Lease Extension Agreement
dated May 2017 by and between the City and Lessee (collectively, the "Lease").
B. Pursuant to that certain Assignment and Assumption Agreement and
Termination of Sublease, dated April 4, 2017, by and among Parrot Jungle, PJG Watson,
L.L.C., a Florida limited liability company, Lessee and the City, recorded in Official
Records Book 30486, Page 2539, Public Records of Miami -Dade County, Florida (the
"Assignment and Assumption"): (i) Parrot Jungle assigned all of its right, title and interest
in and to the Lease and the Subject Property to Lessee, (ii) Lessee assumed Parrot
Jungle's obligations under the Lease (except as otherwise provided in the Assignment
and Assumption) and (iii) Lessee succeeded Parrot Jungle as Lessee under the Lease,
effective as of the Effective Date (as that term is defined in the Assignment and
Assumption), all as more particularly set forth in the Assignment and Assumption.
C. The Third Modification modified the Lease by adding a definition for
"Additional Improvements" which included a themed hotel and related retail and
entertainment, thereby providing Lessee with the opportunity to develop, construct and
operate a hotel on the Subject Property, subject to a ballot referendum approving the
same.
D. The City and Lessee have agreed to further modify the Lease to provide for,
in the event that Lessee proceeds with the construction of the Hotel (as defined below),
(i) the terms and conditions for the development and construction of the Hotel on the
Subject Property, and (ii) an extension of the Lease Term until September 30, 2099, all
subject to, and in accordance with, the terms and conditions set forth in this Modification
and, as stated above, subject to a ballot referendum approving the same.
FILE NO. 4102
MIADOCS 16113299 8 39988. 00311
E. The City Attorney has opined that a 4/5's affirmative commission vote is
required in order to include in the referendum a competitive bid waiver under City of Miami
Charter Sections 3(f)(iii), 29-B and 29-C. The approval of the competitive bid waiver by
referendum also would have the effect of waiving any applicable competitive bidding
requirement in the City Code.
F. On April 12, 2018, the City Commission approved the Modification and also
approved by 4/5's affirmative vote the inclusion of the competitive bid waiver in the
referendum.
G. This execution of this Modification was authorized by City Commission
Resolution No.
H. This Modification was approved by referendum on August 28, 2018 (the
"Referendum"), by a majority of City of Miami voters as required by City of Miami Charter
Sections 3(f)(iii), 29-B and 29-C.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Lessor and Lessee hereby agree as follows:
1. Recitals; Definitions. The foregoing Recitals are true and correct and are
incorporated herein by reference. All capitalized terms used in the foregoing Recitals
and elsewhere in this Modification, but not defined herein, shall have the meanings
ascribed to those terms in the Lease.
2. Lease Term. The Lease Term currently expires on September 30, 2060.
Notwithstanding anything to the contrary in the Lease, in the event that the Master Permit
(as defined below) for construction of the Hotel is issued, the Lease Term shall be
extended to September 30th, 2099. Lessor and Lessee will, prior to commencement of
such extension term, order and receive appraisals of the Subject Property, in accordance
with Section 5.3 of the Lease, for purposes of calculating Rent for such extension term.
3. Additional Extension Term. Assuming the Lease Term has already been
extended to September 30, 2099, the Lessee is hereby granted the option of further
extending the Lease Term for a single fifteen (15) year period (the "Additional Extension
Term") provided the Lessee is not in default of any of the material provisions of the Lease
or this Modification on the date of the exercise of the option. The Lessee may exercise
this option at any time after December 31, 2076. To exercise this option, the Lessee
must give the Lessor prior written notice at least six (6) months prior to the expiration of
the Lease Term. The Additional Extension Term will be on all of the same terms and
conditions as contained in the Lease and this Modification. Lessor and Lessee will, prior
to commencement of the Additional Extension Term, order and receive appraisals of the
Subject Property, in accordance with Section 5.3 of the Lease, for purposes of calculating
Rent for the Additional Extension Term.
MIADOCS 16113299 8 39988. 00312
4. Section 1.2 — Defined Terms. Section 1.2 of the Lease is hereby amended
to delete the defined term "Additional Improvements" and replace it with the following
defined term:
"Hotel" means a theme based hotel on the Subject Property, with ancillary retail
and/or restaurant space not to exceed ten thousand (10,000) square feet and
meeting space not to exceed thirty thousand (30,000) square feet. The Hotel shall
be subject to all applicable planning, zoning and building requirements and other
applicable governmental approvals. Further, the Hotel shall have a maximum
height of One Hundred Thirty feet (130') (as height is defined in the zoning code),
and contain no more than Three Hundred (300) rooms, with the parking required
under the zoning code, which may be located on the Subject Property or within
1,000 feet of the Subject Property.
For the avoidance of doubt, any mention anywhere in the Lease of the term "Additional
Improvements" shall now be replaced with "Hotel".
In addition, the defined term "Leasehold Improvements" set forth in Section 1.2 of the
Lease is hereby amended to include the Hotel, once constructed, as part of the Leasehold
Improvements.
5. Development and Construction of Hotel. The Lease is hereby amended to
add the following provisions regarding the development and construction of the Hotel:
(a) Lessee's Right to Construct & Maintain Hotel
The Lessee shall have the right, but not the obligation, at its own cost
and expense, to design, develop, construct, install, equip, operate, manage,
sublease, rent and maintain the Hotel on the Subject Property in
accordance with the terms and conditions set forth below. If Lessee elects
to proceed with the development of the Hotel, Lessee shall be required to
comply with all of the requirements imposed herein as well as in the Lease.
(b) Architectural Plans
Lessee shall, at Lessee's sole cost and expense and within sixty (60)
days of the Effective Date, submit to Lessor for Lessor's approval (not to be
unreasonably withheld, delayed, or conditioned) its Architectural Plans
(defined below) for the development and construction of the Hotel. The
approval of the Architectural Plans under this Modification will be deemed
to be made only in Lessor's capacity as landlord. The "Architectural Plans"
shall be defined to include, but not be limited to, the design and location of
the Hotel and open space, the estimated commencement and completion
dates for construction, estimated times and manner of delivery of equipment
and materials, and the proposed location of on -site utility systems and all
connections to utility supply lines at the perimeter of the Subject Property,
all necessary roadways, ramps, pedestrian circulation and parking areas,
required landscaping (including the landscaping of open space) and fences.
MIADOCS 16113299 8 39988. 00313
In the event that Lessor disapproves Lessee's Architectural Plans,
Lessor must do so in writing delivered to Lessee within ninety (90) days of
Lessor's receipt of such plans. Lessor's notice shall include a reasonable
explanation of the reason(s) for Lessor's objection(s). Lessee shall, within
thirty (30) days of receipt of such notice, or such longer period of time as
the parties shall determine is reasonable in light of the requested
modifications, modify the Architectural Plans in accordance with the
reasons set forth in Lessor's disapproval notice. Lessor shall be required
to approve or disapprove by written notice to Lessee any resubmitted
Architectural Plans within ninety (90) days of its receipt of same (so long as
any disapproval notice contains the detail as required above). In the event
that the Lessor fails to provide written notice of disapproval within ninety
(90) days of Lessee's submittal or resubmittal of the Architectural Plans to
Lessor, then such Architectural Plans shall be deemed approved by Lessor
in its capacity as a landlord. The Parties shall reasonably cooperate to
resolve any differences regarding the Architectural Plans, and until the
Lessor has approved the Architectural Plans or failed to timely deliver a
disapproval notice to Lessee, the Lessee shall continue to resubmit revised
Architectural Plans or additional information as required by the Lessor.
(c) Construction Plans
(i) Submission. Lessee shall, at Lessee's sole cost and
expense, submit to Lessor for Lessor's approval (not to be unreasonably
withheld, delayed, or conditioned) its Construction Plans (defined below) for
the commencement and completion of the construction of the Hotel.
The plans submitted shall include final and complete plans and
specifications, drawings, calculations and data setting forth the construction
work (the "Construction Work"), with the same detail as would be submitted
in an application for a building permit, along with a detailed critical path
timeline for performing the same (collectively, the "Construction Plans").
Additionally, Lessee's architect or engineer shall include in this submittal a
certification that these Construction Plans are in conformance and
consistent with the previously approved Architectural Plans. The
Construction Plans shall bear the seal of Lessee's architect or engineer.
The Lessee shall submit such additional data, detail and/or information as
the Lessor may reasonably request in order to properly review the Lessee's
Construction Plans. Notwithstanding anything to the contrary herein, the
Architectural Plans and the Construction Plans, whether or not submitted to
the Lessor, shall be retained by, and remain the property of, the Lessee,
subject to Florida's public records law.
In the event that Lessor disapproves Lessee's Construction Plans,
Lessor must do so in writing delivered to Lessee within ninety (90) days of
Lessor's receipt of such plans. Lessor's notice shall include a reasonable
explanation of the reason(s) for Lessor's objection(s). Lessee shall, within
MIADOCS 16113299 8 39988. 00314
thirty (30) days of receipt of such notice, or such longer period of time as
the parties shall determine is reasonable in light of the requested
modifications, modify the Construction Plans in accordance with the
reasons set forth in Lessor's disapproval notice. Lessor shall be required
to approve or disapprove by written notice to Lessee any resubmitted
Construction Plans within ninety (90) days of its receipt of same (so long as
any disapproval notice contains the detail as required above). In the event
that the Lessor fails to provide written notice of disapproval within ninety
(90) days of Lessee's submittal or resubmittal of Construction Plans to
Lessor, then such Construction Plans shall be deemed approved by Lessor
in its capacity as a landlord. The Parties shall reasonably cooperate to
resolve any differences regarding the Construction Plans, and until the
Lessor has approved the Construction Plans or failed to timely deliver a
disapproval notice to Lessee, the Lessee shall continue to resubmit revised
Construction Plans or additional information as required by the Lessor.
Notwithstanding anything to the contrary in this Modification, Lessor shall
not have the right, in its landlord capacity, to disapprove any items approved
as part of the Architectural Plans. The Lessor may refuse to grant approval
if, in its reasonable opinion, any of the proposed Construction Work as set
forth in the Construction Plans:
a. is unsafe, unsound, hazardous or improper for the use
and occupancy for which it is designed; or
b. is designed for use for purposes other than those
authorized under this Modification; or
c. is inconsistent with the approved Architectural Plans;
or
d. does not comply with any other provisions and terms
of the Referendum or this Modification, or
e. does not comply with Florida law, the City
Charter, the City Code, Miami 21, or any other applicable laws or
regulations.
(ii) Lessee Solely Responsible. The Lessee agrees to be solely
responsible for any plans and specifications used by it and for any Toss or
damages resulting from the use thereof, notwithstanding that the same have
been approved by the Lessor and notwithstanding the incorporation therein
of Lessor recommendations or requirements. In no event shall approval by
the Lessor, in its capacity as Landlord, of any plans, whether the
Architectural Plans, Construction Plans, or otherwise, impose any liability
on the Lessor to the Lessee or any other person for any errors or defects
contained in such plans or for the failure of the Hotel or work related to such
MIADOCS 16113299 8 39988. 00315
plans to comply with any requirements, any such liability to be that of the
Lessee and/or the professionals who prepared such plans.
(d) Lessee's Financial Obligations; Proof of Funds
All costs, whether "hard" and/or "soft" costs, for the development and
construction of the Hotel ("Hotel Construction Costs") shall be borne, and
paid by Lessee, which Hotel Construction Costs may be financed through
a third -party lender, provided that at no time shall the total financing for such
Hotel Construction Costs be greater than seventy five percent (75.00%) of
the overall fair market value of the Hotel as determined by the lender. The
total Hotel construction costs shall be no less than fifty million dollars
($50,000,000.00). Lessee shall deliver, prior to any commencement of any
construction, to the City Manager or his/her designee, evidence, as may be
reasonably satisfactory to the Lessor, that Lessee has sufficient funding or
binding funding commitments to construct the Hotel. In the event that
Lessee obtains financing for the construction of the Hotel and in connection
therewith encumbers Lessee's leasehold estate with a mortgage, the
provisions of Article VI (Mortgages and Mortgagees) of the Lease shall
apply to such leasehold mortgage.
(e) Development Schedule
In the event Lessee proceeds with the construction of the Hotel,
Lessee will be required to (i) obtain a Master Building Permit ("Master
Permit") for the Hotel from the City within four (4) years of the Effective Date
of this Modification, and (ii) receive a temporary certificate of occupancy
("TCO") for the Hotel within six (6) years of obtaining the Master Permit.
Notwithstanding anything to the contrary herein, the foregoing time periods
for obtaining the Master Permit and receiving the TCO shall be extended by
delay caused by force majeure, or third party litigation that questions the
validity of a referendum vote or the City Commission action to place a
question for referendum. In the event of delay as specified in the preceding
sentence, the deadlines to obtain a Master Permit and TCO shall be
extended by the length of the delay. All development will comply with the
building permit provisions of Section 29-B of the City Charter, as amended.
If Lessee does not obtain the Master Permit and TCO within the time frames
stated in this Section 5(e), then Lessee shall lose its right to develop the
Hotel and the lease term extensions referenced in Sections 2 and 3 of this
Modification shall not be effective.
(f) Review
Lessor shall have the right, through its duly designated
representatives, to inspect the Construction Work and the plans and
specifications thereof, at reasonable times during working hours and after
MIADOCS 16113299 8 39988. 00316
giving Lessee advance written notice of said site inspection, during the
progress thereof and from time to time, in its discretion.
(g) Contractor's Insurance
The Lessee shall require every contractor performing any work
pertaining to the Hotel to furnish certificates of insurance, including Builder's
Risk insurance, if applicable, in the amounts listed on Exhibit A attached
hereto. Copies of such certificates shall be furnished to the City of Miami
Risk Manager, 444 SW 2nd Avenue 9th Floor, Miami, FL 33130. The City
will be named as an additional insured on such policies.
(h) Conveyance of Improvements
The Lessee, in consideration of the granting of this Modification, shall
upon termination or expiration of the Lease, convey unto Lessor, free and
clear of all liens, title to the Hotel and fixtures that cannot be removed
without causing significant damage to the improvements. Notwithstanding
anything to the contrary, the FF&E and personal property of Lessee and its
subtenants, licensees and concessionaries shall not be conveyed to Lessor
at the end of the Lease Term.
In addition to the Hotel to be conveyed to Lessor as referenced
above, Lessee shall further grant to the Lessor the right to purchase from
the Lessee, all of Lessee's furniture, fixtures and equipment ("FF&E") and
personal property and equipment added to or installed at the Hotel by the
Lessee during the Lease Term, including all furnishings and equipment at
fair market value for used items, determined by an appraiser, whose fees
shall be shared equally by Lessor and Lessee, provided that the Lessor
provides written notice to the Lessee at least forty five (45) days prior to the
expiration or termination of the Lease Term of the items it desires to
purchase. Payment for these personal property and FF&E shall be paid in
full by Lessor on or before the date of termination or expiration of the Lease.
If Lessor does not elect to exercise its right to purchase all of the FF&E and
personal property and equipment, then Lessee shall have all of this property
removed on or before the expiration or termination of the Lease Term. Any
of these items left on the Property after the expiration will be deemed
abandoned and the Lessor has the option to keep said items or have them
removed from the Property and discarded at the Lessee's expense.
(i) Subject Property to Remain Free of Liens
The Lessee shall make, or cause to be made, prompt payment of all
money due and legally owing to all persons doing any work, including
subcontractors, or providing supplies and equipment in connection with the
construction, reconstruction or operation of the Hotel. The Lessee shall
have no power or right to and shall not in any way encumber the Lessor's
MIADOCS 16113299 8 39988. 00317
fee simple interest in the Subject Property. Other than those caused by
Lessor, if any liens or encumbrances shall at any time be filed against the
Subject Property during the Lease Term, then Lessee shall, upon acquiring
knowledge of such lien or encumbrance, promptly take and diligently pursue
a cause of action to have the same discharged or to contest in good faith
the amount or validity thereof and if unsuccessful in such contest, to have
the same discharged or transferred to bond. If Lessee fails to discharge,
contest or bond the lien within one hundred eighty (180) days from the date
the TCO for the Hotel is obtained, then Lessor, in addition to any other right
or remedy that it may have, may take such action as may be reasonably
necessary to protect its interest, and the Lessee shall be responsible for
any and all reasonable verifiable costs incurred by the Lessor in connection
with such action, including all reasonable legal fees, costs and expenses.
(j) Lessor's Approval
All Construction Plans furnished under this Modification are
expressly subject to Lessor's written approval, which the City Manager is
hereby authorized to act on behalf of for purposes of such approval, and
which approval he or she may not unreasonably withhold, condition or
delay, and which approval is subject to the criteria specified in Section
5(c)(i) of this Modification.
No approval by the City Manager of any Construction Plans furnished
under this Modification pursuant to this section shall relieve Lessee of any
obligation it may have at law to file such Construction Plans with any
different governmental authority having jurisdiction over the issues and
obtain approval from said different governmental authority. Notwithstanding
anything in this Modification to the contrary, the approval by the City, in its
capacity as landlord, of the Architectural Plans and Construction Plans
under this Section 5 shall have no effect on the City's regulatory authority
to review such Architectural Plans and Construction Plans. This includes
but is not limited to all planning, zoning, and building requirements and other
City approvals. Such regulatory powers are not waived nor is the City's
regulatory power deemed estopped because the City, in its landlord
capacity, has approved the Architectural Plans and Construction Plans.
6. Hotel Stabilization Date. "Hotel Stabilization Date" means the date that is
the earlier of (a) the first day of the thirty-seventh (37th) month after the date the Hotel
opens to the public for business, or (b) the date the Hotel's Gross Revenue reaches
Twenty -Three Million Dollars ($23,000,000.00) in a year. Lessee and Lessor shall
execute a written document confirming the Hotel Stabilization Date which shall be added
to the Lease.
7. Hotel Annual Rent. Commencing on the date that the Hotel opens for
business to the general public and on the first (1 St) day of every calendar month thereafter
until the Hotel Stabilization Date, Lessee shall pay, in addition to Minimum Annual Rent
MIADOCS 16113299 8 39988. 00318
and Percentage Rent (both of which are not related to the Hotel and do not include Gross
Revenue generated by the Hotel), Hotel Annual Base Rent to Lessor in the amount of
Two Hundred Fifty Thousand Dollars ($250,000.00) per year, payable in equal monthly
installments of Twenty Thousand Eight Hundred Thirty -Three Dollars and Thirty -Four
Cents ($20,833.34) ("Hotel Annual Base Rent"). Beginning on the Hotel Stabilization
Date and on the first (1st) day of every calendar month thereafter, Lessee shall pay Hotel
Annual Base Rent in the amount of One Million One Hundred Fifty Thousand Dollars
($1,150,000.00) per year, payable in equal monthly installments of Ninety -Five
Thousand Eight Hundred Thirty -Three Dollars and Thirty -Four Cents ($95,833.34).
Moreover, Lessee shall pay to Lessor, within sixty (60) days after each anniversary of
the Hotel Stabilization Date, Hotel Annual Percentage Rent in the amount, if any, by
which the sum of Five Percent (5%) of Gross Revenue from the Hotel for the immediately
preceding twelve (12) months exceeds the Hotel Annual Base Rent ("Hotel Annual
Percentage Rent"). If the first payment of Hotel Annual Base Rent does not fall on the
first day of the month, the first payment shall be prorated based on the number of days
in such month. Notwithstanding anything to the contrary in this Modification or in the
Lease, Gross Revenue generated by the Hotel shall not be added to the amount of Gross
Revenue used for calculation of Percentage Rent that Lessee is required to pay under
the Lease.
8. Hotel Annual Base Rent Increase; Credit for Seawall Repairs.
a. Every five (5) years following the first day of the month following the Hotel
Stabilization Date, the Hotel Annual Base Rent will increase by the increase in the
cumulative total of the Consumer Price Index ("CPI") over that prior five (5) year
period, or Four Percent (4%), whichever is lower.
b. The parties acknowledge that the seawall and perimeter fence of the
Subject Property suffered damage and the beach at the Subject Property suffered
erosion due to hurricanes in 2017. Accordingly, it is necessary to perform repairs
to stabilize the "rip -rap" portion of the seawall, install a new perimeter fence after
seawall stabilization is complete, engage in beach renourishment, and perform
related repairs and improvements (collectively, the "Seawall Work"). To the extent
that Lessee expends funds on hard or soft costs for Seawall Work (collectively,
"Seawall Costs"), Lessee shall be entitled to a dollar for dollar credit against rent
due (against Hotel rent and/or non -Hotel rent, at Lessee's option) under the Lease
in the following manner: The maximum amount of the credit for Seawall Work
shall be $500,000. The credit shall be applied in the following amounts: $150,000
credit will be applied to rent due during the first twelve (12) months after the
Effective Date; another $150,000 credit will be applied to rent due during the
second twelve (12) months after the Effective Date; and $200,000 credit will be
applied to rent due during the third twelve (12) months after the Effective Date.
To the extent Seawall Costs do not reach the annual credit amounts per year as
stated above, the amount of the excess may be used as a credit the following
lease year, even if that results in such credit being applied to rent beyond a period
of three (3) years. Lessee agrees to provide Lessor with appropriate receipts and
other reasonable documentation evidencing Lessee's expenditures for Seawall
MIADOCS 16113299 8 39988. 00319
Work. The amount of Seawall Costs credited against rent shall not be considered
as Annual Repair Costs (as defined below) but any Seawall Costs not credited
against rent shall be considered as Annual Repair Costs. The credit referenced
above shall not create an obligation on the part of Lessor to provide any future
similar credits for Seawall Work. Lessee agrees that it is its responsibility to
perform any necessary Seawall Work on the Subject Property, provided that
Seawall Work shall consist of repairs to existing improvements and not the
construction of new improvements.
9. Ichimura-Miami Japanese Gardens. If and only if the Master Permit for the
Hotel is issued and Lessee commences construction of the Hotel, Lessee shall within a
reasonable period of time after commencement of construction of the Hotel (i) construct
a walkway from the Ichimura-Miami Japanese Gardens located adjacent to the Subject
Property (the "Japanese Gardens") to Jungle Island, and (ii) pay for repairs and
maintenance (including but not limited to water, electricity, maintenance personnel, plant
replacements and/or contracted landscapers) for the Japanese Gardens necessary as
of the date of commencement of construction referred to above; provided, however,
notwithstanding anything to the contrary herein, Lessee shall not be obligated to expend
in excess of seven hundred thousand dollars ($700,000.00) in connection with the
aggregate obligations provided in this Section 9.
10. Green Energy Educational Facility and Housing Renovation Fund for Low
Income Persons. When the Master Permit for the Hotel is issued and Lessor executes
and delivers the documents required for Lessee to obtain funding from PACE or a similar
green energy program, then, Lessee shall (a) develop a green energy educational facility
focusing on wind and solar energy at Jungle Island, and (b) agree, for a period of ten
(10) years commencing with the Hotel Stabilization Date, to contribute annually to the
City the sum of Fifty Thousand Dollars ($50,000.00) per year for a fund established for
the renovation of single family homes in blighted areas of the City whose residents are
of low economic means.
11. Capital Improvements. Beginning on the first anniversary of the Hotel
Stabilization Date and each anniversary thereafter Lessee will begin accruing funds into
a reserve account (the "Capital Improvements Reserve Fund") in an amount equal to the
Annual Repair Costs (as defined below) for the corresponding year. Upon the 25th
anniversary of the Hotel Stabilization Date (the "1st Deposit Deadline") all accrued funds
shall be deposited into the Capital Improvements Reserve Fund. (As a matter of
clarification, Lessee shall not be required to adhere to any annual schedule of deposits
and can comply with the preceding sentence by making a lump sum deposit shortly
before the 1st Deposit Deadline.). "Annual Repair Costs" shall be $200,000.00 on the first
anniversary of the Hotel Stabilization Date which shall be increased annually by 2% as
shown on Exhibit B. The Capital Improvements Reserve Funds shall be used by Lessee
to complete major capital improvements and property improvements throughout the
Subject Property including, but not limited to, the Hotel, that exceed the scope of routine
repairs and maintenance as more specifically described in Section 14.1 of the Lease.
MIADOCS 16113299 8 39988. 003110
No later than the 30th anniversary of the Hotel Stabilization Date but no sooner than the
1st Deposit Deadline, the Capital Improvements Reserve Funds due by the 1st Deposit
Deadline shall be applied toward major repairs and improvements to both the Subject
Property and Leasehold Improvements, including but not limited to substantial
mechanical and structural repairs, structural improvements, purchases, upgrades, and
commercially standard general improvements, and/or repairs throughout the Subject
Property, including but not limited to, the Hotel. The Capital Improvements Reserve
Funds shall not be applied to minor repairs due to regular wear and tear. To the extent
that capital improvements are made by vendors or sub -lessees of Lessee, including but
not limited to the zip -line operator, during a twenty-five (25) year period commencing on
the date that Lessee assumed the Lease (i.e., April 4, 2017), a credit for the total cost of
such improvements shall be given toward the Annual Repair Costs.
On the 50th anniversary of the Hotel Stabilization Date (the "2nd Deposit Deadline") Lessee
shall have deposited Capital Improvements Reserve Funds equivalent to the amount
shown for the 50th anniversary date of the Hotel Stabilization Date on the attached Exhibit
B. No later than the 55th anniversary of the Hotel Stabilization Date but no sooner than
the 2nd Deposit Deadline, the Capital Improvements Reserve Funds shall be applied
toward major repairs and improvements to both the Subject Property and Leasehold
Improvements under the same terms and conditions set forth above.
On the 75th anniversary of the Hotel Stabilization
Date (the "3rd Deposit Deadline") Lessee shall have deposited Capital Improvements
Reserve Funds equivalent to the amount shown for the 75th anniversary date of the Hotel
Stabilization Date on the attached Exhibit B. No later than the 80th anniversary of Hotel
Stabilization Date or the expiration of the Lease, whichever comes sooner, but no sooner
than the 3rd Deposit Deadline, the Capital Improvements Reserve Funds shall be applied
toward major repairs and improvements to both the Subject Property and Leasehold
Improvements under the same terms and conditions as set forth above. Notwithstanding
the foregoing, payments and/or accruals into the Capital Improvements Reserve Fund
shall no longer be due after the 3rd Deposit Deadline.
As the Lease is on municipal property, all work that is paid for with Capital Improvements
Reserve Funds shall be bonded if required by section 255.05, Florida Statutes and the
City Code, as amended. The City shall be named an additional obligee on all such bonds
which shall always be maintained on file and be subject to the review and approval of the
City Risk Management Director and City Attorney as to legal form.
Lessee shall maintain financial accounting records together with any corresponding
documentation of Capital Improvements Reserve Funds funding and use. Said records
shall be submitted to the City upon completion of the corresponding capital
improvements.
Lessee shall maintain the Subject Property in a "best -in -class" condition and to consider
capital improvements to the Subject Property on a regular basis, but no Tess often than
as specified above.
MIADOCS 16113299 8 39988. 00311 1
12. Transfer Fee. Upon the Hotel Stabilization Date, Section 8.9(a) of the
Lease shall be deemed amended to read as follows:
"In the event that Lessee realizes a Transfer under the provisions of Subsection
8.3(c) (and subject to Section 8.9(b)), upon receipt by Lessee of the gross sale
proceeds related to such Transfer, Lessee shall pay Lessor an amount equal to
Three Percent (3%) of the gross sale proceeds actually received by Lessee after
the following deductions are made to the gross sale proceeds amount: (i) any
outstanding first debt as well as any other outstanding loans from unaffiliated
governmental, institutional, or REIT lenders owed by Lessee and relating to the
Subject Property, and Tess (ii) all actual, third -party out-of-pocket transaction costs
directly related to such Transfer, including, without limitation, reasonable outside
legal counsel's and accounting fees and costs, outside, unrelated brokerage fees,
documentary stamp taxes, and any other verifiable governmental taxes and fees
(not including income taxes). The City will have access to reasonable
documentation to confirm that the amount of the Transfer Fee paid is accurate.
13. Refinancing Fee. Beginning on the Hotel Stabilization Date and any time
thereafter Lessee consummates any refinancing transaction with any unaffiliated third
party lender (the "Lender") that leads to a mortgage being held by such party
encumbering Lessee's interest in the Subject Property, then the City shall receive a sum
equal to one percent (1.00%) of the refinancing loan proceeds after the following
deductions are made to the refinancing loan proceeds amount: (i) all third party costs
and expenses incurred by Lessee in connection with the refinancing transaction,
including without limitation, Lender's fees, costs and expenses, rating agencies fees,
costs and expenses, title and survey costs, escrow fees, broker fees, appraisal costs,
consultant costs and attorneys' fees and costs, (ii) all amounts required to fully repay the
debt being refinanced, and (iii) all refinancing proceeds not disbursed to Lessee's
investors, including without limitation if such proceeds are invested back into Subject
Property for operating or capital needs. The City will have access to reasonable
documentation to confirm that the amount of the refinancing fee paid is accurate.
14. Ratification. The Lease is hereby ratified and confirmed and remains in full
force and effect, as modified by this Modification. In the event of any conflict between
the terms of the Lease and the terms of this Modification, the terms of this Modification
shall govern.
15. Counterparts. This Modification may be executed in counterparts, each of
which shall constitute an original, but together one instrument.
16. Headings. All headings, titles, defined terms and similar language have
been inserted only for convenience and shall not affect the meaning of any provision of
this Modification.
17. Additional Terms.
a. Regardless of the referendum result, Lessee shall pay the following:
MIADOCS 16113299 8 39988. 003112
1
)
One Hundred Thousand Dollars ($100,000.00) to the City
immediately thereafter the referendum results and
2) 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.
b. Upon referendum approval by the City's residents, the Lessee
shall:
1) 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 the
Lessee of any building permit, with payment to the City of
the remaining Three Hundred Fifty Thousand Dollars
($350,000.00) upon issuance to Lessee of a TCO for the
Hotel and
2) provision, payment, and maintenance of a dedicated trolley
route for Jungle Island, subject to the City's approval of the
route's path and stops, commencing January 1st, 2020.
[Signatures Appear on Following Page]
MIADOCS 16113299 8 39988. 003113
IN WITNESS WHEREOF, the City has caused this Modification to be executed
and delivered in its name and on its behalf by the City Manager of the City of Miami,
Florida, and the City Clerk of the City of Miami, Florida as of the Effective Date, and
Lessee has executed and delivered this Agreement, as of the Effective Date.
ATTEST: CITY OF MIAMI, a municipal corporation of the
State of Florida
By:
Name: Name:
Title: City Clerk Title: City Manager
Name:
Title: City Attorney
APPROVED AS TO FORM AND CORRECTNESS:
By:
Name:
Title: City Attorney
ATTEST:
Name:
Name:
MIADOCS 16113299 8 39988. 003114
ESJ JI LEASEHOLD, LLC, a
Florida limited liability company
By:
Name:
Title:
EXHIBIT A
Contractors Insurance
MIADOCS 16113299 8 39988. 003115
EXHIBIT B
CAPITAL IMPROVEMENT RESERVE FUND CALENDAR
Anniversary Date of Hotel Stabilization Date
Accrual
Amount Due
Amount
1st
$200,000.00
2nd
$204,000.00
3rd
$208,080.00
4th
$212,241.60
5th
$216,486.43
6th
$220,816.16
7th
$225,232.48
8th
$229,737.13
9th
$234,331.88
10th
$239,018.51
11 th
$243,798.88
12th
$248,674.86
13th
$253,648.36
14th
$258,721.33
15th
$263,895.75
16th
$269,173.67
17th
$274,557.14
18th
$280,048.28
19th
$285,649.25
20th
$291,362.23
21 st
$297,189.48
22nd
$303,133.27
23rd
$309,195.93
24th
$315,379.85
25th
$321,687.45
$6,406,059.94
26th
$328,121.20
27th
$334,683.62
28th
$341,377.30
29th
$348,204.84
30th
$355,168.94
31 st
$362,272.32
32nd
$369,517.76
33rd
$376,908.12
34th
$384,446.28
35th
$392,135.21
36th
$399,977.91
37th
$407,977.47
MIADOCS 16113299 8 39988. 003116
38th
$416,137.02
39th
$424,459.76
40th
$432,948.95
41 st
$441,607.93
42nd
$450,440.09
43rd
$459,448.89
44th
$468,637.87
45th
$478,010.63
46th
$487,570.84
47th
$497,322.26
48th
$507,268.70
49th
$517,414.08
50th
$527,762.36
$10,509,820.35
51 st
$538,317.61
52nd
$549,083.96
53rd
$560,065.64
54th
$571,266.95
55th
$582,692.29
56th
$594,346.13
57th
$606,233.06
58th
$618,357.72
59th
$630,724.87
60th
$643,339.37
61 st
$656,206.16
62nd
$669,330.28
63rd
$682,716.89
64th
$696,371.22
65th
$710,298.65
66th
$724,504.62
67th
$738,994.71
68th
$753,774.61
69th
$768,850.10
70th
$784,227.10
71 st
$799,911.64
72nd
$815,909.88
73rd
$832,228.08
74th
$848,872.64
75th
$865,850.09
$17,242,474.26
MIADOCS 16113299 8 39988. 003117
SUBSTITUTED.
FIFTH MODIFICATION TO LEASE AND DEVELOPMENT AGREEMENT
THIS FIFTH MODIFICATION TO LEASE AND DEVELOPMENT AGR MENT
(this "Modification") is made as of the _ day of , 2018 (the "Effe ive Date")
by the CITY OF MIAMI, a municipal corporation of the State of Florida ("Lesr" or "City")
and ESJ JI LEASEHOLD, LLC, a Florida limited liability company ("Less ").
RECITALS:
A. Parrot Jungle and Gardens of Watson Island, Inc., . Florida corporation
f/k/a Parrot Jungle & Gardens, Inc., a Florida corporation ("Parr Jun le") and the City
entered into that certain Lease and Development Agreement •emising to Parrot Jungle
the Subject Property (as defined in the Lease). The Lease a . Development Agreement
is dated September 2, 1997 and has been modified by: that certain Modification to
Lease and Development Agreement, dated April 14, 2000, by and between Parrot Jungle
and the City, (ii) that certain Modification to Lease and Ievelopment Agreement, dated
August 13, 2002, by and between Parrot Jungle and the City, (iii) that certain Third
Modification to Lease and Development Agreeme►', dated October 29, 2008, by and
between Parrot Jungle and the City (the "Third odification"), (iv) that certain Fourth
Modification to Lease and Development Agreement dated, June 24, 2009, by and
between Parrot Jungle and the City, and (v) ' hat certain Lease Extension Agreement
dated May 2017 by and between the City a Lessee (collectively, the "Lease").
B. Pursuant to that certain ssignment and Assumption Agreement and
Termination of Sublease, dated April 4 017, by and among Parrot Jungle, PJG Watson,
L.L.C., a Florida limited liability co ' pany, Lessee and the City, recorded in Official
Records Book 30486, Page 2539, ublic Records of Miami -Dade County, Florida (the
"Assignment and Assumption"): Parrot Jungle assigned all of its right, title and interest
in and to the Lease and the bject Property to Lessee, (ii) Lessee assumed Parrot
Jungle's obligations under th Lease (except as otherwise provided in the Assignment
and Assumption) and (iii) L-ssee succeeded Parrot Jungle as Lessee under the Lease,
effective as of the Effe ive Date (as that term is defined in the Assignment and
Assumption), all as mor- particularly set forth in the Assignment and Assumption.
C. The T► ird Modification modified the Lease by adding a definition for
"Additional Impro ments" which included a themed hotel and related retail and
entertainment, t reby providing Lessee with the opportunity to develop, construct and
operate a hot- on the Subject Property, subject to a ballot referendum approving the
same.
D. The City and Lessee have agreed to further modify the Lease to provide for,
in the e ent that Lessee proceeds with the construction of the Hotel (as defined below),
(i) th- terms and conditions for the development and construction of the Hotel on the
Sub'-ct Property, and (ii) an extension of the Lease Term until September 30, 2099, all
s eject to, and in accordance with, the terms and conditions set forth in this Modification
nd, as stated above, subject to a ballot referendum approving the same.
MIADOCS 16113299 8 39988. 00311
SUBSTITUTED.
E. The City Attorney has opined that a 4/5's affirmative commission vote
required in order to include in the referendum a competitive bid waiver under City of Mi mi
Charter Sections 3(f)(iii), 29-B and 29-C. The approval of the competitive bid wai -r by
referendum also would have the effect of waiving any applicable competitive .idding
requirement in the City Code.
F. On April 12, 2018, the City Commission approved the Modificion and also
approved by 4/5's affirmative vote the inclusion of the competitive bi•. waiver in the
referendum.
G. This execution of this Modification was authorized City Commission
Resolution No.
H. This Modification was approved by referendum •n August 28, 2018 (the
"Referendum"), by a majority of City of Miami voters as requi--d by City of Miami Charter
Sections 3(f)(iii), 29-B and 29-C.
NOW, THEREFORE, in consideration of the tual promises contained herein
and for other good and valuable consideration, the r-ceipt and sufficiency of which are
hereby acknowledged, Lessor and Lessee hereby .=gree as follows:
1. Recitals; Definitions. The foregog Recitals are true and correct and are
incorporated herein by reference. All capit.. zed terms used in the foregoing Recitals
and elsewhere in this Modification, but not defined herein, shall have the meanings
ascribed to those terms in the Lease.
2. Lease Term. The Lea . Term currently expires on September 30, 2060.
Notwithstanding anything to the co ary in the Lease, in the event that the Master Permit
(as defined below) for construc '.n of the Hotel is issued, the Lease Term shall be
extended to September 30th, 2 99. Lessor and Lessee will, prior to commencement of
such extension term, order an receive appraisals of the Subject Property, in accordance
with Section 5.3 of the Lea : -, for purposes of calculating Rent for such extension term.
3. Additional xtension Term. Assuming the Lease Term has already been
extended to Septemb r 30, 2099, the Lessee is hereby granted the option of further
extending the Leas-. erm for a single fifteen (15) year periocL(the "Additional_ Extension_
Term") provided t Lessee is not in default of any of the material provisions of the Lease
or this Modificat'• n on the date of the exercise of the option. The Lessee may exercise
this option at ny time after December 31, 2076. To exercise this option, the Lessee
must give th Lessor prior written notice at least six (6) months prior to the expiration of
the Lease erm. The Additional Extension Term will be on all of the same terms and
conditio as contained in the Lease and this Modification. Lessor and Lessee will, prior
to co encement of the Additional Extension Term, order and receive appraisals of the
Subj ct Property, in accordance with Section 5.3 of the Lease, for purposes of calculating
Re t for the Additional Extension Term.
MIADOCS 16113299 8 39988. 00312
SUBSTITUTED.
4. Section 1.2 — Defined Terms. Section 1.2 of the Lease is hereby amended
to delete the defined term "Additional Improvements" and replace it with the follow'
defined term:
"Hotel" means a theme based hotel on the Subject Property, with ancilla retail
and/or restaurant space not to exceed ten thousand (10,000) square eet and
meeting space not to exceed thirty thousand (30,000) square feet. The 'otel shall
be subject to all applicable planning, zoning and building requireme s and other
applicable governmental approvals. Further, the Hotel shall haw a maximum
height of One Hundred Thirty feet (130') (as height is defined in t zoning code),
and contain no more than Three Hundred (300) rooms, with th parking required
under the zoning code, which may be located on the Subje Property or within
1,000 feet of the Subject Property.
For the avoidance of doubt, any mention anywhere in the Lease of the term "Additional
Improvements" shall now be replaced with "Hotel".
In addition, the defined term "Leasehold Improvements" et forth in Section 1.2 of the
Lease is hereby amended to include the Hotel, once con ructed, as part of the Leasehold
Improvements.
5. Develo • ment and Construction of H '.tel. The Lease is hereby amended to
add the following provisions regarding the deve • pment and construction of the Hotel:
(a) Lessee's R. ht to Constr ct & Maintain Hotel
The Lessee shall hav the right, but not the obligation, at its own cost
and expense, to design, d elop, construct, install, equip, operate, manage,
sublease, rent and : intain the Hotel on the Subject Property in
accordance with the t: ms and conditions set forth below. If Lessee elects
to proceed with the • evelopment of the Hotel, Lessee shall be required to
comply with all of e requirements imposed herein as well as in the Lease.
(b) Archite ral Plans
Les -e shall, at Lessee's sole cost and expense and within sixty (60)
days oft Effective Date, submit to Lessor for Lessor's approval (not to be
unreas• ably withheld, delayed, or conditioned) its Architectural Plans
(define d below) for the development and construction of the Hotel. The
approval of the Architectural Plans under this Modification will be deemed
to •e made only in Lessor's capacity as landlord. The "Architectural Plans"
all be defined to include, but not be limited to, the design and location of
the Hotel and open space, the estimated commencement and completion
dates for construction, estimated times and manner of delivery of equipment
and materials, and the proposed location of on -site utility systems and all
connections to utility supply lines at the perimeter of the Subject Property,
all necessary roadways, ramps, pedestrian circulation and parking areas,
required landscaping (including the landscaping of open space) and fences.
MIADOCS 16113299 8 39988. 00313
SUBSTITUTED.
In the event that Lessor disapproves Lessee's Architectural PI.. s,
Lessor must do so in writing delivered to Lessee within ninety (90) d s of
Lessor's receipt of such plans. Lessor's notice shall include a rea enable
explanation of the reason(s) for Lessor's objection(s). Lessee sh I, within
thirty (30) days of receipt of such notice, or such longer period •f time as
the parties shall determine is reasonable in light of th requested
modifications, modify the Architectural Plans in accordce with the
reasons set forth in Lessor's disapproval notice. Lessor all be required
to approve or disapprove by written notice to Lesse- any resubmitted
Architectural Plans within ninety (90) days of its receipt .f same (so long as
any disapproval notice contains the detail as require. above). In the event
that the Lessor fails to provide written notice of d' approval within ninety
(90) days of Lessee's submittal or resubmittal of ` e Architectural Plans to
Lessor, then such Architectural Plans shall be deemed approved by Lessor
in its capacity as a landlord. The Parties s►all reasonably cooperate to
resolve any differences regarding the Arcitectural Plans, and until the
Lessor has approved the Architectural P ns or failed to timely deliver a
disapproval notice to Lessee, the Lesse: shall continue to resubmit revised
Architectural Plans or additional infor ton as required by the Lessor.
(c) Construction Plans
(i) Submission.
expense, submit to Lessor fo
withheld, delayed, or conditi
the commencement and c
L-.see shall, at Lessee's sole cost and
Lessor's approval (not to be unreasonably
ned) its Construction Plans (defined below) for
mpletion of the construction of the Hotel.
The plans sub itted shall include final and complete plans and
specifications, drawi • s, calculations and data setting forth the construction
work (the "Constru ion Work"), with the same detail as would be submitted
in an application or a building permit, along with a detailed critical path
timeline for pe orming the same (collectively, the "Construction Plans").
Additionally, =ssee's architect or engineer shall include in this submittal a
certification that these Construction Plans are in conformance and
consisten with the previously approved Architectural Plans. The
Constru ion Plans shall bear the seal of Lessee's architect or engineer.
The L: see shall submit such additional data, detail and/or information as
the -ssor may reasonably request in order to properly review the Lessee's
Co struction Plans. Notwithstanding anything to the contrary herein, the
chitectural Plans and the Construction Plans, whether or not submitted to
he Lessor, shall be retained by, and remain the property of, the Lessee,
subject to Florida's public records law.
In the event that Lessor disapproves Lessee's Construction Plans,
Lessor must do so in writing delivered to Lessee within ninety (90) days of
Lessor's receipt of such plans. Lessor's notice shall include a reasonable
explanation of the reason(s) for Lessor's objection(s). Lessee shall, within
MIADOCS 16113299 8 39988. 00314
SUBSTITUTED.
thirty (30) days of receipt of such notice, or such longer period of ti! e as
the parties shall determine is reasonable in light of the re • uested
modifications, modify the Construction Plans in accordance with the
reasons set forth in Lessor's disapproval notice. Lessor shall •e required
to approve or disapprove by written notice to Lessee an resubmitted
Construction Plans within ninety (90) days of its receipt of s- e (so long as
any disapproval notice contains the detail as required ab. e). In the event
that the Lessor fails to provide written notice of disapp oval within ninety
(90) days of Lessee's submittal or resubmittal of C• nstruction Plans to
Lessor, then such Construction Plans shall be deem;. approved by Lessor
in its capacity as a landlord. The Parties shall reasonably cooperate to
resolve any differences regarding the Constru ion Plans, and until the
Lessor has approved the Construction Plans ' r failed to timely deliver a
disapproval notice to Lessee, the Lessee shal continue to resubmit revised
Construction Plans or additional informati• as required by the Lessor.
Notwithstanding anything to the contrary this Modification, Lessor shall
not have the right, in its landlord capacity o disapprove any items approved
as part of the Architectural Plans. The essor may refuse to grant approval
if, in its reasonable opinion, any of t proposed Construction Work as set
forth in the Construction Plans:
a. is unsafe, sound, hazardous or improper for the use
and occupancy for which it is .signed; or
b. is de ,'gned for use for purposes other than those
authorized under this Mo ification; or
c. i inconsistent with the approved Architectural Plans;
or
d does not comply with any other provisions and terms
of the Referenum or this Modification, or
e. does not comply with Florida law, the City
Charter, e City Code, Miami 21, or any other applicable laws or
regulati
(ii) Lessee Solely Responsible. The Lessee agrees to be solely
re ;.onsible for any plans and specifications used by it and for any loss or
mages resulting from the use thereof, notwithstanding that the same have
een approved by the Lessor and notwithstanding the incorporation therein
of Lessor recommendations or requirements. In no event shall approval by
the Lessor, in its capacity as Landlord, of any plans, whether the
Architectural Plans, Construction Plans, or otherwise, impose any liability
on the Lessor to the Lessee or any other person for any errors or defects
contained in such plans or for the failure of the Hotel or work related to such
MIADOCS 16113299 8 39988. 00315
SUBSTITUTED.
plans to comply with any requirements, any such liability to be th-:t of the
Lessee and/or the professionals who prepared such plans.
(d) Lessee's Financial Obligations; Proof of Funds
All costs, whether "hard" and/or "soft" costs, for the
construction of the Hotel ("Hotel Construction Costs") s
paid by Lessee, which Hotel Construction Costs may
a third -party lender, provided that at no time shall the t
Hotel Construction Costs be greater than seventy fi
the overall fair market value of the Hotel as deter
total Hotel construction costs shall be no les
($50,000,000.00). Lessee shall deliver, prior to
construction, to the City Manager or his/her d
reasonably satisfactory to the Lessor, that
binding funding commitments to constr
Lessee obtains financing for the constru
therewith encumbers Lessee's leas
provisions of Article VI (Mortgages
apply to such leasehold mortgage.
(e) Development Schedule
velopment and
be borne, and
financed through
al financing for such
e percent (75.00%) of
ined by the lender. The
than fifty million dollars
any commencement of any
signee, evidence, as may be
ssee has sufficient funding or
the Hotel. In the event that
on of the Hotel and in connection
old estate with a mortgage, the
nd Mortgagees) of the Lease shall
I I
In the event Lessee •roceeds with the construction of the Hotel,
Lessee will be required t• (i) obtain a Master Building Permit ("Master
Permit") for the Hotel fro the City within four (4) years of the Effective Date
of this Modification, an, (ii) receive a temporary certificate of occupancy
("TCO") for the Hotel ithin six (6) years of obtaining the Master Permit.
Notwithstanding an ing to the contrary herein, the foregoing time periods
for obtaining the M ster Permit and receiving the TCO shall be extended by
delay caused by orce majeure, or third party litigation that questions the
validity of a re erendum vote or the City Commission action to place a
question for r erendum. In the event of delay as specified in the preceding
sentence, tr e deadlines to obtain a Master Permit and TCO shall be
extended .y the length of the delay. All development will comply with the
building ' ermit provisions of Section 29-B of the City Charter, as amended.
If Less- e does not obtain the Master Permit and TCO within the time frames
state►, in this Section 5(e), then Lessee shall lose its right to develop the
Ho I and the lease term extensions referenced in Sections 2 and 3 of this
dification shall not be effective.
(f) Review
Lessor shall have the right, through its duly designated
representatives, to inspect the Construction Work and the plans and
specifications thereof, at reasonable times during working hours and after
MIADOCS 16113299 8 39988. 00316
SUBSTITUTED.
giving Lessee advance written notice of said site inspection, duri . the
progress thereof and from time to time, in its discretion.
(g) Contractor's Insurance
The Lessee shall require every contractor perfor g any work
pertaining to the Hotel to furnish certificates of insurance, in uding Builder's
Risk insurance, if applicable, in the amounts listed on hibit A attached
hereto. Copies of such certificates shall be furnished . the City of Miami
Risk Manager, 444 SW 2nd Avenue 9th Floor, Miami L 33130. The City
will be named as an additional insured on such poli es.
(h) Conveyance of Improvements
The Lessee, in consideration of the granting of this Modification, shall
upon termination or expiration of the Leas , convey unto Lessor, free and
clear of all liens, title to the Hotel and tures that cannot be removed
without causing significant damage to t improvements. Notwithstanding
anything to the contrary, the FF&E an• personal property of Lessee and its
subtenants, licensees and concessio aries shall not be conveyed to Lessor
at the end of the Lease Term.
In addition to the Hotel
above, Lessee shall further g
the Lessee, all of Lessee's
personal property and eq
Lessee during the Leas
fair market value for
shall be shared equ
provides written no
expiration or ter
purchase. Pay
full by Lessor
If Lessor do
personal p
removed • n
of thes
aban
re
o be conveyed to Lessor as referenced
nt to the Lessor the right to purchase from
rniture, fixtures and equipment ("FF&E") and
pment added to or installed at the Hotel by the
Term, including all furnishings and equipment at
u-ed items, determined by an appraiser, whose fees
ly by Lessor and Lessee, provided that the Lessor
e to the Lessee at least forty five (45) days prior to the
ination of the Lease Term of the items it desires to
nt for these personal property and FF&E shall be paid in
or before the date of termination or expiration of the Lease.
not elect to exercise its right to purchase all of the FF&E and
perty and equipment, then Lessee shall have all of this property
or before the expiration or termination of the Lease Term. Any
items left on the Property after the expiration will be deemed
oned and the Lessor has the option to keep said items or have them
ved from the Property and discarded at the Lessee's expense.
Subject Property to Remain Free of Liens
The Lessee shall make, or cause to be made, prompt payment of all
money due and legally owing to all persons doing any work, including
subcontractors, or providing supplies and equipment in connection with the
construction, reconstruction or operation of the Hotel. The Lessee shall
have no power or right to and shall not in any way encumber the Lessor's
MIADOCS 16113299 8 39988. 00317
SUBSTITUTED.
fee simple interest in the Subject Property. Other than those ca ed by
Lessor, if any Hens or encumbrances shall at any time be filed a• : inst the
Subject Property during the Lease Term, then Lessee shall, upo► acquiring
knowledge of such lien or encumbrance, promptly take and dili• ntly pursue
a cause of action to have the same discharged or to conte ' in good faith
the amount or validity thereof and if unsuccessful in such •ontest, to have
the same discharged or transferred to bond. If Lessee ils to discharge,
contest or bond the lien within one hundred eighty (180 says from the date
the TCO for the Hotel is obtained, then Lessor, in addi on to any other right
or remedy that it may have, may take such action :s may be reasonably
necessary to protect its interest, and the Lessee hall be responsible for
any and all reasonable verifiable costs incurred • the Lessor in connection
with such action, including all reasonable legal ees, costs and expenses.
(j) Lessor's Approval
All Construction Plans furnished under this Modification are
expressly subject to Lessor's written .•proval, which the City Manager is
hereby authorized to act on behalf • for purposes of such approval, and
which approval he or she may not unreasonably withhold, condition or
delay, and which approval is s eject to the criteria specified in Section
5(c)(i) of this Modification.
No approval by the Ci Manager of any Construction Plans furnished
under this Modification puruant to this section shall relieve Lessee of any
obligation it may have t law to file such Construction Plans with any
different governmental authority having jurisdiction over the issues and
obtain approval from id different governmental authority. Notwithstanding
anything in this Mo• fication to the contrary, the approval by the City, in its
capacity as landlord, of the Architectural Plans and Construction Plans
under this Section 5 shall have no effect on the City's regulatory authority
to review suc Architectural Plans and Construction Plans. This includes
but is not lim' ed to all planning, zoning, and building requirements and other
City appro als. Such regulatory powers are not waived nor is the City's
regulato power deemed estopped because the City, in its landlord
capacit, , has approved the Architectural Plans and Construction Plans.
6. Ho -I Stabilization Date. "Hotel Stabilization Date" means the date that is
the earlier of (- the first day of the thirty-seventh (37th) month after the date the Hotel
opens to the •ublic for business, or (b) the date the Hotel's Gross Revenue reaches
Twenty-Thre Million Dollars ($23,000,000.00) in a year. Lessee and Lessor shall
execute a ritten document confirming the Hotel Stabilization Date which shall be added
to the L: -se.
7. Hotel Annual Rent. Commencing on the date that the Hotel opens for
bu ness to the general public and on the first (1 St) day of every calendar month thereafter
u r til the Hotel Stabilization Date, Lessee shall pay, in addition to Minimum Annual Rent
MIADOCS 16113299 8 39988. 00318
SUBSTITUTED.
and Percentage Rent (both of which are not related to the Hotel and do not includ
Revenue generated by the Hotel), Hotel Annual Base Rent to Lessor in the a
Two Hundred Fifty Thousand Dollars ($250,000.00) per year, payable in equ
installments of Twenty Thousand Eight Hundred Thirty -Three Dollars and
Cents ($20,833.34) ("Hotel Annual Base Rent"). Beginning on the Hot
Date and on the first (1st) day of every calendar month thereafter, Lesse
Annual Base Rent in the amount of One Million One Hundred Fifty
($1,150,000.00) per year, payable in equal monthly installme
Thousand Eight Hundred Thirty -Three Dollars and Thirty -Four
Moreover, Lessee shall pay to Lessor, within sixty (60) days aft
the Hotel Stabilization Date, Hotel Annual Percentage Rent i
which the sum of Five Percent (5%) of Gross Revenue from th
preceding twelve (12) months exceeds the Hotel Annual
Percentage Rent"). If the first payment of Hotel Annual
first day of the month, the first payment shall be prorate
in such month. Notwithstanding anything to the con
Lease, Gross Revenue generated by the Hotel shall
Revenue used for calculation of Percentage Rent
the Lease.
ross
ount of
I monthly
hirty-Four
Stabilization
shall pay Hotel
ousand Dollars
s of Ninety -Five
ents ($95,833.34).
r each anniversary of
the amount, if any, by
Hotel for the immediately
ase Rent ("Hotel Annual
se Rent does not fall on the
based on the number of days
ary in this Modification or in the
t be added to the amount of Gross
at Lessee is required to pay under
8. Hotel Annual Base Rent Increa Credit for Seawall Re airs.
a. Every five (5) years following he first day of the month following the Hotel
Stabilization Date, the Hotel Annu l Base Rent will increase by the increase in the
cumulative total of the Consum-r Price Index ("CPI") over that prior five (5) year
period, or Four Percent (4%), hichever is lower.
b. The parties acknow -dge that the seawall and perimeter fence of the
Subject Property sufferedamage and the beach at the Subject Property suffered
erosion due to hurrican, s in 2017. Accordingly, it is necessary to perform repairs
to stabilize the "rip-ra portion of the seawall, install a new perimeter fence after
seawall stabilizatio is complete, engage in beach renourishment, and perform
related repairs an• improvements (collectively, the "Seawall Work"). To the extent
that Lessee ex.. - nds funds on hard or soft costs for Seawall Work (collectively,
"Seawall Cost ), Lessee shall be entitled to a dollar for dollar credit against rent
due (against otel rent and/or non -Hotel rent, at Lessee's option) under the Lease
in the follo ing manner: The maximum amount of the credit for Seawall Work
shall be 00,000. The credit shall be applied in the following amounts: $150,000
credit ill be applied to rent due during the first twelve (12) months after the
Effec ve Date; another $150,000 credit will be applied to rent due during the
sec.nd twelve (12) months after the Effective Date; and $200,000 credit will be
a• •lied to rent due during the third twelve (12) months after the Effective Date.
o the extent Seawall Costs do not reach the annual credit amounts per year as
stated above, the amount of the excess may be used as a credit the following
lease year, even if that results in such credit being applied to rent beyond a period
of three (3) years. Lessee agrees to provide Lessor with appropriate receipts and
other reasonable documentation evidencing Lessee's expenditures for Seawall
MIADOCS 16113299 8 39988. 00319
SUBSTITUTED.
Work. The amount of Seawall Costs credited against rent shall not be co idered
as Annual Repair Costs (as defined below) but any Seawall Costs n• credited
against rent shall be considered as Annual Repair Costs. The credi eferenced
above shall not create an obligation on the part of Lessor to provi , e any future
similar credits for Seawall Work. Lessee agrees that it is its r-sponsibility to
perform any necessary Seawall Work on the Subject Prope , provided that
Seawall Work shall consist of repairs to existing improve -nts and not the
construction of new improvements.
9. Ichimura-Miami Japanese Gardens. If and only if t
Hotel is issued and Lessee commences construction of the H
reasonable period of time after commencement of constructi
a walkway from the Ichimura-Miami Japanese Gardens loc
Property (the "Japanese Gardens") to Jungle Island,
maintenance (including but not limited to water, electrici
replacements and/or contracted landscapers) for the
of the date of commencement of construction refe
notwithstanding anything to the contrary herein, Le
in excess of seven hundred thousand dollars
aggregate obligations provided in this Section
10. Green Energy Educational Fa
Income Persons. When the Master Perm
and delivers the documents required for
green energy program, then, Lessee s
focusing on wind and solar energy
(10) years commencing with the H
City the sum of Fifty Thousand D
the renovation of single family
of low economic means.
11.
Stabilization Date and ea
a reserve account (the "
Annual Repair Costs
anniversary of the H
shall be deposite
clarification, Les
and can comp
before the 1st
anniversary
shown on
to com
Subje
reps' s
Master Permit for the
el, Lessee shall within a
of the Hotel (i) construct
ted adjacent to the Subject
nd (ii) pay for repairs and
, maintenance personnel, plant
apanese Gardens necessary as
red to above; provided, however,
see shall not be obligated to expend
700,000.00) in connection with the
lity and Housing Renovation Fund for Low
for the Hotel is issued and Lessor executes
essee to obtain funding from PACE or a similar
II (a) develop a green energy educational facility
Jungle Island, and (b) agree, for a period of ten
tel Stabilization Date, to contribute annually to the
lars ($50,000.00) per year for a fund established for
mes in blighted areas of the City whose residents are
Capital Impr• ements. Beginning on the first anniversary of the Hotel
anniversary thereafter Lessee will begin accruing funds into
apital Improvements Reserve Fund") in an amount equal to the
as defined below) for the corresponding year. Upon the 25th
tel Stabilization Date (the "1st Deposit Deadline") all accrued funds
into the Capital Improvements Reserve Fund. (As a matter of
ee shall not be required to adhere to any annual schedule of deposits
with the preceding sentence by making a lump sum deposit shortly
eposit Deadline.). "Annual Repair Costs" shall be $200,000.00 on the first
of the Hotel Stabilization Date which shall be increased annually by 2% as
xhibit B. The Capital Improvements Reserve Funds shall be used by Lessee
ete major capital improvements and property improvements throughout the
Property including, but not limited to, the Hotel, that exceed the scope of routine
and maintenance as more specifically described in Section 14.1 of the Lease.
MIADOCS 16113299 8 39988. 003110
SUBSTITUTED.
No later than the 30th anniversary of the Hotel Stabilization Date but no sooner tran the
1st Deposit Deadline, the Capital Improvements Reserve Funds due by the 1 s Deposit
Deadline shall be applied toward major repairs and improvements to both t'e Subject
Property and Leasehold Improvements, including but not limited to substantial
mechanical and structural repairs, structural improvements, purchases, :.grades, and
commercially standard general improvements, and/or repairs throughout the Subject
Property, including but not limited to, the Hotel. The Capital Impro: ements Reserve
Funds shall not be applied to minor repairs due to regular wear and ear. To the extent
that capital improvements are made by vendors or sub -lessees of essee, including but
not limited to the zip -line operator, during a twenty-five (25) year eriod commencing on
the date that Lessee assumed the Lease (i.e., April 4, 2017), a , redit for the total cost of
such improvements shall be given toward the Annual Repair osts.
On the 50th anniversary of the Hotel Stabilization Date (the nd Deposit Deadline") Lessee
shall have deposited Capital Improvements Reserve Funds equivalent to the amount
shown for the 50th anniversary date of the Hotel Stabilization Date on the attached Exhibit
B. No later than the 55th anniversary of the Hotel St.. ilization Date but no sooner than
the 2nd Deposit Deadline, the Capital Improveme s Reserve Funds shall be applied
toward major repairs and improvements to both the Subject Property and Leasehold
Improvements under the same terms and condi ns set forth above.
On the 75th anniversary of the Hotel Stabilization
Date (the "3rd Deposit Deadline") Lessee shall have deposited Capital Improvements
Reserve Funds equivalent to the amount : own for the 75th anniversary date of the Hotel
Stabilization Date on the attached Exhi%It B. No later than the 80th anniversary of Hotel
Stabilization Date or the expiration of e Lease, whichever comes sooner, but no sooner
than the 3rd Deposit Deadline, the C.;pital Improvements Reserve Funds shall be applied
toward major repairs and improvements to both the Subject Property and Leasehold
Improvements under the same t ms and conditions as set forth above. Notwithstanding
the foregoing, payments and/• accruals into the Capital Improvements Reserve Fund
shall no longer be due after t►e 3rd Deposit Deadline.
As the Lease is on munici.al property, all work that is paid for with Capital Improvements
Reserve Funds shall b- .onded if required by section 255.05, Florida Statutes and the
City Code, as amender.. The City shall be named an additional obligee on all such bonds
which shall always b- maintained on file and be subject to the review and approval of the
City Risk Manage ► ent Director and City Attorney as to legal form.
Lessee shall raintain financial accounting records together with any corresponding
documentatio of Capital Improvements Reserve Funds funding and use. Said records
shall be bmitted to the City upon completion of the corresponding capital
improvem nts.
Lease: shall maintain the Subject Property in a "best -in -class" condition and to consider
capit . improvements to the Subject Property on a regular basis, but no less often than
as .ecified above.
MIADOCS 16113299 8 39988. 00311 1
SUBSTITUTED.
12. Transfer Fee. Upon the Hotel Stabilization Date, Section 8.9(. of the
Lease shall be deemed amended to read as follows:
"In the event that Lessee realizes a Transfer under the provisions .' Subsection
8.3(c) (and subject to Section 8.9(b)), upon receipt by Lessee of ~ e gross sale
proceeds related to such Transfer, Lessee shall pay Lessor an .; mount equal to
Three Percent (3%) of the gross sale proceeds actually receiv-. by Lessee after
the following deductions are made to the gross sale proceeds amount: (i) any
outstanding first debt as well as any other outstanding loans from unaffiliated
governmental, institutional, or REIT lenders owed by Lessee and relating to the
Subject Property, and less (ii) all actual, third -party out -of socket transaction costs
directly related to such Transfer, including, without limation, reasonable outside
legal counsel's and accounting fees and costs, outsid-, unrelated brokerage fees,
documentary stamp taxes, and any other verifiable •overnmental taxes and fees
(not including income taxes). The City will have access to reasonable
documentation to confirm that the amount of the ransfer Fee paid is accurate.
13. Refinancing Fee. Beginning on the tel Stabilization Date and any time
thereafter Lessee consummates any refinancing ransaction with any unaffiliated third
party lender (the "Lender") that leads to a ortgage being held by such party
encumbering Lessee's interest in the Subject P operty, then the City shall receive a sum
equal to one percent (1.00%) of the refi . ncing loan proceeds after the following
deductions are made to the refinancing loproceeds amount: (i) all third party costs
and expenses incurred by Lessee in ,onnection with the refinancing transaction,
including without limitation, Lender's f:-s, costs and expenses, rating agencies fees,
costs and expenses, title and survey osts, escrow fees, broker fees, appraisal costs,
consultant costs and attorneys' fees nd costs, (ii) all amounts required to fully repay the
debt being refinanced, and (iii) 'I refinancing proceeds not disbursed to Lessee's
investors, including without limitation if such proceeds are invested back into Subject
Property for operating or cap' al needs. The City will have access to reasonable
documentation to confirm tha the amount of the refinancing fee paid is accurate.
14. Ratification. he Lease is hereby ratified and confirmed and remains in full
force and effect, as mo.' ied by this Modification. In the event of any conflict between
the terms of the Lease nd the terms of this Modification, the terms of this Modification
shall govern.
15. Cour er.arts. This Modification may be executed in counterparts, each of
which shall cons: tute an original, but together one instrument.
16. eadin.s. All headings, titles, defined terms and similar language have
been inserte• only for convenience and shall not affect the meaning of any provision of
this Modification.
[Signatures Appear on Following Page]
MIADOCS 16113299 8 39988. 003112
SUBSTITUTED.
IN WITNESS WHEREOF, the City has caused this Modification to be e: ecuted
and delivered in its name and on its behalf by the City Manager of the City •f Miami,
Florida, and the City Clerk of the City of Miami, Florida as of the Effectiv_ Date, and
Lessee has executed and delivered this Agreement, as of the Effective Dat
ATTEST: CITY OF MIAMI, a municipal corporation of the
State of Florida
By:
Name: Name:
Title: City Clerk Title: City M. ager
Name:
Title: City Attorney
APPROVED AS TO FORM AND CORRECTN S:
By:
Name:
Title: City Attorney
ATTEST:
Name:
Name:
MIADOCS 16113299 8 39988. 00311 3
ESJ JI LEASEHOLD, LLC, a
Florida limited liability company
By:
Name:
Title:
SUBSTITUTED.
EXHIBIT A
Contractors Insurance
MIADOCS 16113299 8 39988. 00311 4
SUBSTITUTED.
EXHIBIT B
CAPITAL IMPROVEMENT RESERVE FUND CALENDAR
Anniversary Date of Hotel Stabilization Date
Accrual
Am ,, unt Due
Amount
1st
$200,000.00
2nd
$204,000.00
3rd
$208,080.00
4th
$212,241.60
5th
$216,486.4.•
6th
$220,816 ' 6
7th
$225,2 .48
8th
$229 37.13
9th
$23 ",331.88
10th
$ 9,018.51
11 th
: 243, 798.88
12th
$248,674.86
13th
$253,648.36
14th
$258,721.33
15th
$263,895.75
16th
$269,173.67
17th
$274,557.14
18th
$280,048.28
19th
$285,649.25
20th
$291,362.23
21 st
$297,189.48
22nd
$303,133.27
23rd
$309,195.93
24th
$315,379.85
25th
$321,687.45
$6,406,059.94
26th
$328,121.20
27th
$334,683.62
28th
$341,377.30
29th
$348,204.84
30th
$355,168.94
31 st
$362,272.32
32nd
$369,517.76
33rd
$376,908.12
34th
$384,446.28
35th
$392,135.21
36
$399,977.91
3 th
$407,977.47
MIADOCS 16113299 8 39988. 00311 5
SUBSTITUTED.
38th
$416,137.02
39th
$424,459.76
40th
$432,948.95
41 st
$441,607.93
42nd
$450,440.09
43rd
$459,448.89
44th
$468,637.87
45th
$478,010.63
46th
$487,570.84
47th
$497,322.26
48th
$507,268.7 0
49th
$517,414.,, 8
50th
$527,76i .36
$10,509,820.35
51st
$538, 17.61
52nd
$54 ' ,083.96
53rd
$ •0,065.64
54th
571,266.95
55th
$582,692.29
56th
$594,346.13
57th
$606,233.06
58th
$618,357.72
59th
$630,724.87
60th
$643,339.37
61 st
$656,206.16
62nd
$669,330.28
63rd
$682,716.89
64th
$696,371.22
65th
$710,298.65
66th
$724,504.62
67th
$738,994.71
68th
$753,774.61
69th
$768,850.10
70th
$784,227.10
71 st
$799,911.64
72nd
$815,909.88
73rd
$832,228.08
74th
$848,872.64
75th
$865,850.09
$17,242,474.26
MIADOCS 16113299 8 39988. 00311 6