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TERM SHEET
PROPOSED GROUND LEASE AND MASTER DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF MIAMI AND MIAMI FREEDOM PARK, LLC
This Tenn Sheet outlines the basis upon which the City of Miami (the "City") would lease to
Miami Freedom Park, LLC ("MFP") certain real property owned by the City and generally located
at 1400 N.W. 37t1i Avenue, Miami, Florida 33125. The proposed transaction is subject to: (i)
approval by the City's qualified electors of an amendment to Section 29-B of the City's Charter, as
amended, to authorize the City Commission to waive competitive bidding and negotiate a Ground
Lease and Master Development Agreement (the "Lease") with MFP; and (ii) the negotiation,
execution and delivery by the City and MFP of a mutually acceptable and legally binding
definitive Lease consistent with the following provisions:
1. Leased Premises and Term:
2. Permitted Uses:
Approximately seventy-three (73) acres (the "Leased
Premises") of the property generally located at 1400
N.W. 37t1i Avenue, Miami, Florida 33125, identified
as all or portions of folio numbers 01-3132-000-0080
and 01-3132-000-0090, currently known as the
Melreese Golf Course (the "Property"). The term will
be 39 years, with MFP's option to extend for two
additional 30-year periods, for a total term of up to
99-years.
Construction, development and use of: (i) a
professional soccer complex inclusive of an
approximately 25,000 seat stadium and related
facilities (the "Soccer Stadium"); and (ii) ancillary
development, including, but not limited to, (a) a
minimum of 1,000,000 square feet of office, retail and
entertainment uses, and (b) approximately 750 hotel
rooms and conference center (the "Ancillary
Development").
FILE NO. 4450 1
3. Annual Rent:
4. No City Funding
5. Capital Transaction Fee:
6. Public Park:
Annual rent payable to the City by MFP will be equal
to the greater of (a) the Fair Market Value of the
Leased Premises or (b) 5.0% of the Rent, but under no
circumstances less than $3,577,000 per year. The
"Fair Market Value" will be based on the highest and
best use of the Demised Premises taking into
consideration the actual cost of environmental
remediation for the Property, the site development
cost for the Park (as defined below), and such other
impositions and limitations on the use of the Property
consistent with the Uniform Standards of Professional
Appraisal Practice). The Fair Market Value will be
determined through the selection of independent
appraisers through a process mutually acceptable to
the parties. The term "Rent" will mean the gross rent
revenue derived by MFP from the lease of the soccer
stadium and any portion of the Ancillary
Development on the Demised Premises exclusive of
the Demised Premises' pass -through operating
expenses paid by tenants to MFP under such leases.
MFP, at no cost to the City, will fund the development
of the Soccer Stadium and the Ancillary
Development. For avoidance of doubt, the City will
have no obligation to pay for any portion of the
development of the Soccer Stadium or the Ancillary
Development, including any cost associated with the
environmental remediation of the Leased Premises.
To the extent MFP seeks Federal or State economic
incentives, the City shall not be responsible for any
matching contribution, which may be required.
MFP will pay to the City an amount equal to 1 % of the
gross proceeds received by MFP from any Capital
Transaction. The phrase "Capital Transaction" means
any transfer of the interests of MFP in the Lease
which results in a change of control or other similar
transaction.
On or prior to the issuance of a certificate of occupany
for the Soccer Stadium, MFP will complete the site
development work for the approximately 58 acre
public park adjacent to the Demised Premises (the
2
"Park"). The site development work will consist of (i)
the environmental remediation necessary for the
public use of the Park, and (ii) such draining,
dredging, excavating, filling, grading, and earthwork
as necessary to complete the Park pursuant to the
specifications set forth in the Lease.
7. Additional Park Contribution In addition to the annual rent and the site development
and Baywalk-Riverwalk for the Park, MFP will contribute to the City
Committment: $20,000,000, payable over 30 years in equal annual
installments, for improvements to greenspace and
parks. In addition to the $20,000,000 for
improvements to greenspace and parks, MFP will
contribute an additional $5,000,000 for the
completion of the City' s Baywalk-Riverwalk Project.
8. No Net Loss:
9. Environmental Remediation:
10. Living Wage and Labor Peace
Agreement:
MFP will comply with the existing No Net Loss
Policy in the City of Miami Comprehensive Plan.
The amount of acreage required to comply with such
policy, as a result of the rezoning of such property,
will be satisfied prior to the issuance of a certificate of
occupancy for any structures in the rezoned property.
MFP will be responsible for all environmental
remediation of the Property, including the Park and
the Leased Premises. The environmental remediation
plans will be developed by MFP, at its sole cost, and
will be subject to approval by the Miami -Dade
County Department of Environmental Resources
Management. MFP currently estimates that the
environmental remediation costs for the development
will be approximately $35 million.
Covered. Employees will be paid a living wage of n.o
less than S 15.00 per hour without health benefits; or
a living wage of no less than $13.19 an hour with
health benefits (the "Living Wage"). The phrase
"Covered Employees" means those hourly
employees of MFP who primarily work at the
Demised Premises. In addition, MFP will establish a
policy that tenants at the Demised Premises will pay
a Living Wage to their employees primarily working
at the Demised Premises based on a sliding scale
implemented over 4 years commencing at $11.00 per
hour. The sliding scale will apply to employees and
service providers at the soccer stadium. The policy
3
11. First Tee Commitment:
12. Professional Services
Agreement Termination Fee:
13. Open Soccer Fields
shall not apply to employees primarily receiving
compensation through tips. MFP will provide
incentives to qualified small businesses to encourage
them to provide a Living Wage to their employees.
MFP has commenced negotiations with Unite Here,
Local 355, on a Labor Peace Agreement. 20% of
construction force will be union labor.
MFP will make available space within the Ancillary
Development to the First Tee Program for its
educational programs and will design a golf facility,
with the consent of the City, to include driving ranges
and other amenities for use by the First Tee Program.
The Professional Services Agreement between the
City and Delucca Enterprises, Inc., terminates on
September 30, 2021 (the "PSA"). The PSA provides
the City the right to terminate the PSA prior to such
termination date, which may require the payment of a
termination fee. If required to terminate the PSA,
MFP will reimburse the City for the amount of such
termination fee.
The Project will include an elevated platform with
public use soccer fields over the 23 acres of ground
floor parking.
4
SUBSTITUTED.
TERM SHEET
PROPOSED GROUND LEASE AND MASTER DEVELOPMENT AGREEMEN
BETWEEN THE CITY OF MIAMI AND MIAMI FREEDOM PARK, LLC'
July 18, 2018
This Term Sheet outlines the basis upon which the City of Miami (the "City") wuld lease to
Miami Freedom Park, LLC ("MFP") certain real property owned by the City and g erally located
at 1400 N.W. 37th Avenue, Miami, Florida 33125. The proposed transaction 's subject to: (i)
approval by the City's qualified electors of an amendment to Section 29-B of he City's Charter,
as amended, to authorize the City Commission to waive competitive bis,J ing and negotiate a
Ground Lease and Master Development Agreement (the "Lease") w-'h MFP; and (ii) the
negotiation, execution and delivery by the City and MFP of a mutua r acceptable and legally
binding definitive Lease consistent with the following provisions:
1. Demised Premises and Term: Approximately seve r` y-three (73) acres (the
"Demised Premise of the property generally
located at 1400 . 37th Avenue, Miami, Florida
33125, identifie as all or portions of folio numbers
01-3132-000-1- 80 and 01-3132-000-0090, currently
known as thr Melreese Golf Course (the "Property").
The term ill be 39 years, with MFP's option to
extend ,yr two additional 30-year periods, for a total
term . up to 99-years.
2. Permitted Uses: Cr struction, development and use of: (i) a
rofessional soccer complex inclusive of an
approximately 25,000 seat stadium and related
facilities (the "Soccer Stadium"); and (ii) ancillary
development, including, but not limited to, (a) a
minimum of 1,000,000 square feet of office, retail and
entertainment uses, and (b) approximately 750 hotel
rooms and conference center (the "Ancillary
Development").
3. Annual Rent: Annual rent payable to the City by MFP will be equal
to the greater of (a) the Fair Market Value of the
Demised Premises or (b) 5.0% of the Rent, but under
no circumstances less than $3,577,000 per year. The
"Fair Market Value" will be based on the highest and
best use of the Demised Premises taking into
consideration the actual cost of environmental
remediation for the Property, the site development
cost for the Park (as defined below), and such other
impositions and limitations on the use of the Property
consistent with the Uniform Standards of Professional
Appraisal Practice). The Fair Market Value will be
determined through the selection of independent
1
Term Sheet
SUBSTITUTED.
appraisers through a process mutually acc.'. table to
the parties. The term "Rent" will mean thy'gross rent
revenue derived by MFP or its affiliates om the lease
of the soccer stadium and any portion ' the Ancillary
Development on the Demised Pre :'ses exclusive of
the Demised Premises' pass-, ough operating
expenses paid by tenants to MFP under such leases.
4. No City Funding: MFP, at no cost to the City, w'll fund the development
of the Soccer Stadiu.f and the Ancillary
Development. For avoi..nce of doubt, the City will
have no obligation to, pay for any portion of the
development of the , , ccer Stadium or the Ancillary
Development, incl . ing any cost associated with the
environmental re ediation of the Demised Premises,
To the extent ; P seeks Federal or State economic
incentives, t r` City shall not be responsible for any
matching c.' tribution, which may be required.
5. Capital Transactions Fee: MFP w- pay to the City an amount equal to 1 % of
the gr«ss proceeds received by MFP from any Capital
Tra action. The phrase "Capital Transaction" means
a transfer of the interests of MFP in the Lease which
sults in a change of control or other similar
transaction.
6. Public Park:
On or prior to the issuance of a certificate of occupany
for the Soccer Stadium, MFP will complete the site
development work for the approximately 58 acre
public park adjacent to the Demised Premises (the
"Park"). The site development work will consist of (i)
the environmental remediation necessary for the
public use of the deliverable Park, and (ii) such
draining, dredging, excavating, filling, grading, and
earthwork as necessary to complete the Park pursuant
to the specifications set forth in the Lease.
7. Additioi al Park Contribution In addition to the annual rent and the site development
and :, ywalk-Riverwalk for the Park, MFP will contribute to the City
Co mittment: $20,000,000, payable over 30 years in equal annual
installments, for improvements to greenspace and
parks. In addition to the $20,000,000 for
improvements to greenspace and parks, MFP will
contribute an additional $5,000,000 for the
completion of the City's Baywalk-Riverwalk Project.
2
SUBSTITUTED.
Term Sheet
8. No Net Loss: MFP will comply with the existing No et Loss
Policy in the City of Miami Comprehensiv'- Plan. The
amount of acreage required to comp, with such
policy, as a result of the rezoning o such property,
will be satisfied prior to the issuance, of a certificate of
occupany for any structures in the ' ezoned property.
9. Environmental Remediation: MFP will be responsible r all environmental
remediation of the Property; `including the Park and
the Demised Premises, The environmental
remediation plans will ., developed by MFP, at its
sole cost, and will b subject to approval by the
Miami -Dade County Department of Environmental
Resources Manag- ' ent. MFP currently estimates
that the enviro ental remediation costs for the
development w; be approximately $35 million.
10. Living Wage and Labor
Peace Agreement:
11. First Tee Commitment.
Covered Ei ;F•loyees will be paid a living wage of no
less than ' .5.00 per hour without health benefits; or
a living age of no less than $13.19 an hour with
health . benefits. The phrase "Covered Employees"
mea . those hourly employees of MF.P, its affiliates
an `their service providers who primarily work at the
emised Premises. MFP has commenced
egotiations with Unite Here, Local 355, on a Labor
Peace Agreement. 20% of the construction
workforce will be on site union labor.
MFP will make available space within the Ancillary
Development to the First Tee Program for its
educational programs and will design a golf facility,
with the consent of the City, to include driving ranges
and other amenities for use by the First Tee Program.
12. Professional ervices The Professional Services Agreement between the
Agreement. ` ermination City and Delucca Enterprises, Inc., terminates on
Fee: September 30, 2021 (the "PSA"). The PSA provides
the City the right to terminate the PSA prior to such
teiinination date, which may require the payment of a
termination fee. If required to terminate the PSA,
MFP will reimburse the City for the amount of such
termination fee.
13. Open Soccer Fields The Project will include an elevated lite platform
wit ; public use soccer fields over the 23 acres of ground floor parking.
3
IMPLAN Model - One Time Impacts
S ft CiliS
Lcollttlnic Im act. from I`ttlistructitli
mpact Type
Direct Effect
Indirect. Effect
Induced Effect
Total Effect
Direct Effect
indirect Effect
Induced Effect
Total
Direct Effect 5
Indirect Effect S
Induced Effect $
Total
Direct Effect
Indirect Effect
Induced Effect
Total
5
Year
2.52%
196
30
62
288
9,618.363 5
1,755,178 $
2,681,669 $
14,055,210 $
49,155 $
58,149 $
43.401 $
48,863 $
from Constriction (Total & Annualized)
p1oyment Labor income Total Value Added
7,767 $381,776,818 $531,163,072
1.198 469,667,393 S114,518,886
2,453 $106, 2_149 S195,097,734
1,417
35,04%
2,722
420
859
4,001
'ear 2
133,779,381 S
24,412,327 $
37,298,663 $
/95,490_371 5
Year 2
49,155
5 , • 5
.401 5
48,863 $
557,886„359
35.04%
2,722
420
859
4,001
u1
$967,312,444
S208,377,243
$332,021,393
$840,779,692 , 07,711,080
6,64%
.tts flesnit ttf ('Onstntetttit
4
516
80
163
759
SUBSTITUTED.
6.64%
80
163
759
I „illtrtt' Ittatute its a Resttlt of C.n structit»t (24118 S't,/
Vear 3
133,779,381 5
24,412,327
37,298,663
195,490
25,368,431
4,629,282
7,072,903
37,070,616
.53%
Year 6
274
42
87
403
Year 5 Year 6
$ 25,368,431 8 13,465,708
$ 4,629,282 S 2,457,249
$ 7,072,903 S 3,754,337
$ 37,070,616 5 19,677,294
400$714t.-4ti1w140011A11101gRojittgoir4omttigtiAjca6Rk'::$!:s.):42fill!!!„„
Y 3 Year4 Year 5
49,155 $ 49,155 S 49,155 5
58,149 $ 58,149 $ 58,149 5
43,401 $ 43,401 $ 43.401 $
48,863 $ 48,863 S 48,863 $
Year 6
49,155 $
58,149 5
43,401 $
48,863 S
5.53%
Year 7
274
42
87
403
3,53%
Year
274
42
87
403
3.53%
Year
274
42
87
Year 7 Year 8 Year9
8 13,465,7(18 $ 13,465,708 $ 13,465,708
S 2,457,249 S 2,457,249 $ 2,457,249
S 3,754,337 $ 3,754.337 $ 3,754,337
8 19,677.294 5 19,677,294 $ 19,677,294
403
Year 7 Yt Year 9
49,155 $ 49,155 $ 42,155
58,149 $ 58,149 $ 58,149
43,401 $ 43,401 $ 43,401
48,363 S 48,863 $ 48,863
HARLAN Model -Recurrenting Impacts
Din Effect
in3rt Effect
Induced Effect
Total Effect
,498
325 $
409 $
64.850,502
13,240148 $
14,697,160 S
43,315.42
40,73892
35,934.38
2,232
92,823,810
41,5$8
Stt,
e•fl (Sfil,Ifuffl)
Impact Type
Direct Effect
Indirect Effect
Induced Effect
Employment Labor Income
50 $10,964,122
10 5770,156
64 52,765,664
Total Value Added
S13,922,536
S1,122,346
$5,068,411
Output
S15,499,999
S1.666,585
S8,628,397
Total Effirt
134 $14,499,944
520,113,294 $25,794, 2
Ititriact 0'0111 Statifliicd ()f16rat4,11,
Impact Type
Direct Effect
Indirect Effect
Induced Effect
Employment Labor Income
1,43S S53,922,380
315 512,469,992
345 S11,931,496
Total Value Added
S86,150.683
S21,237,081
S21,866,441
Output
$124,562,860
532,967,566
$33,748,843
Total Effect
2,098 $78,324,070
$129,254,209 8191.279,274
.t,Iff'd,
Lcononflc I fltf,ncl teffflf Vint' 4if93illIon, tEnfemfinffle0l 41Heltfil)
mpact Type
Direct Effect
Indirect Effect
Induced Effect
Total Effect
EmploymentEmploymetit Leberlorome T!V1aeMt1ed Ott
412 $10,435,447 511,595,315 S .664,01
47 $2,215,462 $4,331,535 $7,434,720
69 62,982,401 55,466,122 59,303,541
328 S 5,63 ,3 1 521, 2 $34, 347
tititis
trifffitct,Ifioni Stabili/ed,Veartfticitiont. (l'och (enter)
impact Type
'Ma Effect
Indirect EtTect
nduced Effect
Total Effect
mploymeot Labor Income
556 $23,963,421
133 50,261,3
132 52,6 ,523
1 VoleMded
S35,796;382
$5,226,279
54.947.525
Output
S47,712,810
55,226,279
54,947,525
21
•
4,533
5,970 S
Ecollfftnic rrollt Sfillfilind Year Olferffflofts (Fell iffofVfcc & Select Stfrf icf,1101,11
act Type
Direct Effect
Indirect Effect
Induced Effect
Total Effect
,886,616
ploy 1 Labor Income Value Added 0u1pu1
470 S19,523,512 S33,758,986 $59,185,966
135 56,993,201 511,679,267 $20,306,567
/ 44 56,249,512 511,452,794 $19,497,777
749 532,766,226 6 ,S91,048 598,990,3
SUBSTITUTED.
SUBSTITUTED.
JulyT7208
Mr. Jorge Mas
Dear Mr. Mae:
You have asked usLo estimate the impact on property values in eurnourding residential
neighborhoods associated with the development of a signature Miami Freed om Park. open at no
cost tothe public o*the site pfthe currently fenced Ne|raoseCountry Clu
Lambert Advisory (Lambert) nearly identical analysis tothe Miami Downtown
Development Authority (Miami DDA) in late 2047 associated /th the expansion of the
Miami DQA'mboundary tninclude the Underline right-of+°ay. /h|k*the Underline |slinear
in nature, the studies have been quite consistent intheirfindin a; that well designedparhend
recreation facilities open at no cost to the public positively i,/pact real estate values under
avariety ofconfigurations.
Anom6erofnational studies have indicated that the ar.aufinfluence oFosignature parkuh
residential real estate values occurs principally wit , n approximately 1/3 of a mile of the
park (cornparativekc for commercial values the *.1mmry area of influence is within S0O
feet). The positive impact on values is appno ' a1*|y plus 3 to 5 percent with larger
signature parks such asthe proposed MiomiF'ee6omPark skewing tothe higher end of
that range. Based upon the findings of theser' udies, we have estimated the value creation
which the development of the Miarni Freewono Park would have on the surrounding real
estate parcels asoutlined below,
Attached isamap ofresidential parcek. which are within 1/3mile *asto,sputhofthe current
Melreese Country Club.
Within this area, andbased upo r data from the Miami -Dade Property Appraiser, there are
1'042 residential units withi the area of influence, 636 (over 619W of which have a
homestead exemption, The, ast majorityofunits in the area, 949 of the 1,042, are single
family structures (81E) ort/'ofamily homes (134).The average current assessed value for
single family homes ieS/' 5,30Oand among the 2^4homes which were sold inthe area
within 1/3ofamile oft - park between the beginning uf2OlGand April 2Cq8'the average
sales price was just u~derS224`OOC).
SUBSTITUTED.
Mr. Jorge Mas
Applying an impact multiplier generated by anew Miami Freedom Park on the surro nding
residential parcels, the average homeowner in current dollars is likely to enjoy as uohas
an additional S11,000 in market value as a result of the development of the Fre- 4unnPark,
This benefits owners inrelation tothe sale price they can achieve ifthey 6ecid;, tosell their
property orasbrelates toleverage for financing. Likewise, based upon e "/6inuneasehn
value, assessed values in the area for tax purposes would increase by /orethah $6.0
million intotal oncethe Park is operating, To what extent this would impac,, tax revenue over
time is dependent upon each individual unit's homestead vs. non-ho testead status and
how quickly homes continue hzchange hands lnthe area.
| hope this answers your questions. Should you have any further 'questions regarding Our
estimates or analysis please do not hesitate to contact me at 305) 503-4095 or via
email: rn
Verytruly yours,
Paul Lambert
Managing Principal
2
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Residential Parcels in 1/3 Mile of Boundary