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HomeMy WebLinkAboutAgenda Item Summary FormAGENDA ITEM SUMMARY FORM File ID: #5974 Date: 06/04/2019 Commission Meeting Date: 06/27/2019 Type: Resolution Subject: Lease Agreement - MRC Purpose of Item: Requesting Department: Department of Real Estate and Asset Management Sponsored By: District Impacted: District 5 A Resolution of the Miami City Commission, with attachment(s), authorizing the City Manager to execute an Agreement and Lease ("Lease Agreement"), in substantially the attached form, between the City of Miami ("City") and Lancelot Miami River, LLC ("Lancelot"), whereby the City leases approximately 3.15 acres of City -owned property located at 444 and 460 SW 2nd Ave, Miami, Florida ("Property") to Lancelot for a 99- year term with an option to purchase, for an annual rent equal to $3,620,000, with other terms and conditions more particularly described in the Lease Agreement; further authorizing the City Manager to make non -substantive amendments to such Lease Agreement as needed, subject to the City Attorney's review and approval. Background of Item: The City of Miami ("City") owns the riverfront property located at 444 and 460 SW 2nd Avenue, Miami, Florida 33130, commonly known as the Miami Riverside Center ("MRC"). The City is interested in developing a new City administrative facility to accommodate the increasing number of the City's administrative employees and meet the growing needs of the City's residents. On February 2, 2016 the City issued a competitive solicitation, inclusive of Offering Memorandum No. 15-16-008 ("OM") for the sale/lease of the MRC, and Request for Proposals No. 15-16-009 ("RFP") for the development of a new City administrative facility (collectively the "OM & RFP"). The City Commission approved the City Manager's and Selection Committee's recommendation to select the top -ranked bidder for the OM & RFP, Lancelot Miami River, LLC, an affiliate of Adler Group ("Lancelot") by Resolution No. R-16-0611 on December 8, 2016. On July 26, 2018, the City Commission approved the ballot language for the MRC sale and development of a new administrative facility together with a term sheet for the ground lease of the MRC by Resolution No. R-18-0324. On November 6, 2018, the disposition of the MRC was approved by the electorate. The City has finalized negotiations of the terms for the MRC disposition with Lancelot and prepared an agreement and lease ("MRC Lease"). The MRC Lease provides for a privately -funded mixed -use riverfront development, an enhanced public Riverwalk and other public amenities. Annual rent shall be equal to three million six hundred and twenty thousand dollars ($3,620,000), which will increase in the sixth (6th) lease year to the greater of three million six hundred and twenty thousand dollars ($3,620,000), increasing one and one-half percent (1.5%) annually thereafter, or three percent (3%) of gross revenues. The MRC Lease further provides an option to purchase for sixty-nine million four hundred thousand dollars ($69,400,000), a two percent (2%) capital transaction fee, and other terms and conditions more particularly described in the MRC Lease. Budget Impact Analysis Item is Related to Revenue Item is NOT funded by Bonds Total Fiscal Impact: $3,620,000 annually ($69,400,000 when purchase option exercised) General Account No: TBD Special Revenue Account No: TBD Real Estate and Asset Management Department of Risk Management Office of Management and Budget Office of Management and Budget City Manager's Office City Manager's Office City Commission City Commission Office of the Mayor Office of the City Clerk Office of the City Attorney Legislative Division Office of the City Attorney Office of the City Attorney Office of the City Attorney Office of the City Clerk Reviewed B Yvonne Hernandez Ann -Marie Sharpe Pedro Lacret Christopher M Rose Fernando Casamayor Nikolas Pascual Maricarmen Lopez Maricarmen Lopez Mayor's Office City Clerk's Office Valentin J Alvarez Valentin J Alvarez Valentin J Alvarez Outside Counsel Outside Counsel City Clerk's Office Department Head Review Department Head Review Budget Analyst Review Budget Review Assistant City Manager Review City Manager Review Meeting Meeting Completed Completed Completed Completed Completed Completed Completed Completed Signed by the Mayor Completed Signed and Attested by the City Clerk Completed Deputy City Attorney Review Skipped Legislative Division Review Completed Approved Form and Correctness Skipped City Attorney Skipped Approved Form and Correctness Completed Rendered Completed 05/31/2019 10:25 AM 05/31/2019 2:14 PM 06/03/2019 1:28 PM 06/04/2019 3:18 PM 06/04/2019 3:59 PM 06/04/2019 4:28 PM 06/13/2019 9:00 AM 06/27/2019 9:00 AM 07/08/2019 3:54 PM 07/08/2019 4:23 PM 06/04/2019 4:38 PM 07/25/2019 3:56 PM 06/14/2019 5:56 PM 01/15/2020 6:09 PM 01/15/2020 6:09 PM 01/22/2020 4:11 PM City of Miami Legislation Resolution Enactment Number: R-19-0254 City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com File Number: 5974 Final Action Date:6/27/2019 A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT AND LEASE ("MRC LEASE"), IN SUBSTANTIALLY THE ATTACHED FORM, AS NEGOTIATED PURSUANT TO RESOLUTION NO. 17-0266 BY WEISS SEROTA HELFMAN COLE & BIERMAN AS SPECIAL REAL ESTATE COUNSEL, BETWEEN THE CITY OF MIAMI ("CITY") AND LANCELOT MIAMI RIVER, LLC ("LANCELOT"), WHEREBY THE CITY LEASES APPROXIMATELY 3.15 ACRES OF CITY -OWNED PROPERTY LOCATED AT 444 AND 460 SOUTHWEST 2ND AVE, MIAMI, FLORIDA (COLLECTIVELY, THE "PROPERTY"), TO LANCELOT FOR A NINETY-NINE (99) YEAR TERM WITH AN OPTION TO PURCHASE, FOR AN ANNUAL RENT EQUAL TO $3,620,000.00, WITH OTHER TERMS AND CONDITIONS MORE PARTICULARLY DESCRIBED IN THE MRC LEASE; FURTHER AUTHORIZING THE CITY MANAGER TO MAKE NON - SUBSTANTIVE AMENDMENTS TO SUCH MRC LEASE AS NEEDED, SUBJECT TO THE CITY ATTORNEY'S REVIEW AND APPROVAL. WHEREAS, the City of Miami ("City") owns the riverfront property located at 444 and 460 Southwest 2nd Avenue, Miami, Florida 33130, commonly known as the Miami Riverside Center ("MRC"); and WHEREAS, the City is interested in developing a new City administrative facility to accommodate the increasing number of the City's administrative employees and meet the growing needs of the City's residents; and WHEREAS, on February 2, 2016, the City issued a competitive solicitation, inclusive of Offering Memorandum No. 15-16-008 ("OM") for the disposition of the MRC, and Request for Proposals No. 15-16-009 ("RFP") for the development of a new City administrative facility including necessary parking (collectively the "OM & RFP"); and WHEREAS, pursuant to Resolution No. 16-0611, adopted on December 8, 2016, the City Commission approved the City Manager's and Selection Committee's recommendation to select Lancelot, the top -ranked bidder for the OM & RFP; and WHEREAS, pursuant to Resolution No. 18-0324, adopted on July 26, 2018, the City Commission approved (1) the ballot language for the MRC sale and the design and development of a new administrative building, together with (2) a term sheet for the ground lease of the MRC; and WHEREAS, on November 6, 2018, the disposition of the MRC and the design and development of a new administrative building was approved by the electorate; and WHEREAS, the City has finalized negotiations of the terms for the MRC disposition with Lancelot and prepared an agreement and lease in substantially the form attached ("MRC Lease"); and WHEREAS, pursuant to Resolution No. 17-0266, adopted on June 8, 2017, the City Commission authorized the retention of Weiss Serota Helfman Cole & Bierman ("Special Real Estate Counsel") to negotiate the MRC Lease pursuant to Resolution No. 16-0611; and WHEREAS, the MRC Lease provides for a privately -funded mixed -use riverfront development, including an enhanced public Riverwalk and other public amenities; and WHEREAS, annual minimum rent shall be equal to three million six hundred and twenty thousand dollars ($3,620,000.00), which will increase in the sixth (6th) lease year to the greater of three million six hundred and twenty thousand dollars ($3,620,000.00), increasing one and one-half percent (1.5%) annually thereafter, or three percent (3%) of gross revenues; and WHEREAS, the MRC Lease further provides an option for Lancelot to purchase the Property for sixty-nine million four hundred thousand dollars ($69,400,000.00), a two percent (2%) capital transaction fee, and other terms and conditions more particularly described in the MRC Lease; and NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are adopted by reference and incorporated as if fully set forth in this Section. Section 2. The City Manager is hereby authorized' to execute the MRC Lease with Lancelot, in substantially the form presented at this meeting, as negotiated pursuant to Resolution No. 17-0266 by Special Real Estate Counsel, including but not limited to the following terms: (a) The term of the MRC Lease shall not exceed ninety-nine (99) years. (b) Lancelot shall pay the City an amount not less than three million six hundred and twenty thousand dollars ($3,620,000.00) per year, which will increase in the sixth (6th) lease year to the greater of three million six hundred and twenty thousand dollars ($3,620,000.00), increasing one and one-half percent (1.5%) annually thereafter, or three percent (3%) of gross revenues. (c) The purchase option will provide for an option price equal to the land value, which has been determined by two (2) state -certified appraisers procured by the City to be sixty-nine million four hundred thousand dollars ($69,400,000.00), increasing by 2% per year upon the tenth (10th) anniversary of the Commencement Date, as more particularly described in the MRC Lease. (d) Lancelot shall pay a two percent (2%) capital transaction fee and the obligation to pay the capital transaction fee shall run with the land until paid, as more particularly calculated and described in the MRC Lease. (e) The City Manager is further authorized to administratively make non -substantive Amendments to the Lease, subject to the City Attorney's review and approval as to legal form in conformity with all applicable Laws, regulations, the Charter Referendum Question approved relative to this Lease, and this Resolution. 1 The herein authorization is further subject to compliance with all requirements that may be imposed by the City Attorney, including but not limited to, those prescribed by applicable City Charter and City Code provisions. Section 3. A declaration of restrictions shall be separately recorded against the property located adjacent to the MRC at 230 Southwest 3 Street, Miami, Florida 33130, and owned by Lancelot, providing that any residential rental housing developed on that site shall restrict a minimum of ten percent (10%) of the units for workforce housing. Section 4. This Resolution shall become effective immediately upon adoption and signature of the mayor.2 APPROVED AS TO FORM AND CORRECTNESS: OUTSIDE COUNSEL 1/15/2020 Outside Counsel Outside Counsel 1/15/2020 2 If the Mayor does not sign this Resolution, it shall become effective at the end of ten (10) calendar days from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become effective immediately upon override of the veto by the City Commission.