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HomeMy WebLinkAboutCRA-R-20-0005 Scrivener's Error MemoSEOPW CRA Board of Commissioners Meeting May 28, 2020 SOUTHEAST OVERTOWN/PARK WEST COMMUNITY REDEVELOPMENT AGENCY INTEROFFICE MEMORANDUM To: Todd Hannon Clerk of the SEOPW CRA Board Date: September 1, 2020 File: 7480 Subject: Scrivener's Error — CRA Resolution, adopted on May 28, 2020, ratifying the Fifth Amendment and Sixth Amendment and authorizing execution of the Seventh Amendment to the Development Agreement between the CRA and Downtown Retail Associates, LLC for the disposition and development of Block 55 From: Chanel H. Jefferson, Esq. References: SEOPW CRA Staff Counsel Enclosures: Legislation and May 28, 2020 CRA Board Meeting Interoffice Memorandum The Southeast Overtown/Park West Community Redevelopment Agency's ("CRA") Resolution, adopted on May 28, 2020, ratifying the Fifth Amendment and Sixth Amendment and authorizing execution of the Seventh Amendment to the Development Agreement between the CRA and Downtown Retail Associates, LLC for the disposition and development of Block 55 contained a scrivener's error in which an inadvertent clerical error resulted in the omission of approximately two (2) pages of the Resolution. The complete item was reflected in the attached interoffice memorandum, which was part of the agenda packet, and fully discussed before the CRA Board of Commissioners ("Board") when they voted on the item at the Board's meeting on May 28, 2020. Whereas the Resolution shall be corrected to now include the full body of the Resolution. Chanel JefferSep 1, 202013:59 EDT) Chanel H. Jefferson, Esq. SEOPW CRA Staff Counsel 7480 Scrivener's Error Memo SEOPW CRA Board of Commissioners Meeting May 28, 2020 SOUTHEAST OVERTOWN/PARK WEST COMMUNITY REDEVELOPMENT AGENCY INTER -OFFICE MEMORANDUM To: Board Chair Keon Hardemon Date: May 28, 2020 File: and Members of the SEOPW CRA Board Subject: Resolution ratifying the execution of the Fifth Amendment and Sixth Amendment, and authorizing execution of the Seventh Amendment to the Development Agreement between the CRA and Downtown Retail Associates, LLC From: Cornelius Shiver References: Executive Director Enclosures: Exhibit "A", Exhibit "B", Exhibit "C" BACKGROUND: The attached Resolution of the Board of Commissioners of the Southeast Overtown/Park West Community Redevelopment Agency ("CRA") ratifies the Fifth Amendment and Sixth Amendment, and authorizes the execution of the Seventh Amendment to the Development Agreement between the CRA and Downtown Retail Associations, LLC ("Developer"), which was previously executed by the Executive Director. On July 26, 2017, the CRA issued a Request for Proposals ("RFP") 17-02 for the disposition and development of Block 55 located at 249 NW 6th Street, Miami, FL (Folio #: 01-0105-050-1120). The CRA received two (2) responses to RFP 17-02. On March 1, 2018, the CRA Board of Commissioners (the "Board"), by Resolution CRA-18-0009, accepted and authorized the selection committee's recommendation to select Downtown Retail Associates, LLC as the top -ranked proposer to develop Block 55. On September 24, 2018, the Board authorized the acceptance of certain negotiated terms in the Development Agreement between the CRA and the Developer. On October 1, 2018 the Block 55 Development Agreement was executed, which was amended by Amendment dated November 21, 2018, by Second Amendment dated April 17, 2019, by the Third Amendment dated September 26, 2019 and by the Fourth Amendment dated as of December 20, 2019 (collectively, the "Development Agreement"), all of which have been previously approved by the Board. Block 55 will be developed as a mixed -use development consisting of not less than 250,000 square feet of retail, office, restaurant and entertainment uses, and not less than 500 residential units (collectively the "Project"), with twenty percent (20%) of the units to be provided to residents earning fifty percent (50%) or less of the Miami - Dade County Area Median Income. The Fifth Amendment to the Development Agreement, attached hereto as Exhibit "A", contains, in part, the following modifications to the Development Agreement: • Payment of Incremental Tax Increment Financing ("TIF"): As a development incentive, the CRA shall pay to Developer an incentive payment equal to up to 70% of the incremental TIF generated from this specific Project only, and with use limitations. • Affordable Housing: The Developer has agreed that not less than twenty percent (20%) of the residential units in the Project or approximately 154 units, consisting of a mix of studio and one -bedroom units, will be made available to individuals and families earning at 50% or less of the Miami -Dade County Area Median Income. • Retail Opportunity for CRA: The Developer will make available approximately 1,000 rentable square feet for a CRA supported business at 50% of the average total rent. This space will be available for a CRA sponsored tenant for the duration of the life of the CRA. • Space for City/CRA: The Developer will make available to the City or the CRA approximately 1,000 square feet of rentable space at $1.00 per year for use as a police substation Neighborhood Enhancement Team office, or such other use specified by the CRA for the life of the CRA. • Extension Fee Dates: The Fifth Amendment provides that the Second Closing Extension Deposit in the amount of $500,000, which is credited against the purchase price, and the Second Additional Consideration in the amount of $300,000, which does not get credited against the purchase price, shall be due on or prior to the Closing Date of March 31, 2020 instead of March 20, 2020. • Assignment Prior to Closing: Developer has the right to assign the Development Agreement to, and the CRA agrees to convey the Property to, a new limited liability company to be formed to own the Property ("Property Owner"), which is 100% owned by a second new limited liability company ("Holdings"), provided that (i) Holdings is the sole member and owner of Property Owner, (ii) Developer owns at least 63% of the ownership interests of Holdings, (iii) an entity controlled by David Martin and Pedro Martin ("Terra Entity") owns the balance of the ownership interests of Holdings, (iv) Michael Swerdlow or an entity he controls retains all decision making in respect of Holdings and Property Owner except for certain major decisions, (v) Developer provides copies of the organizational documents of Property Owner and Holdings confirming the ownership and management and (vi) Terra Entity confirms that it has not paid cash consideration for its interest in Holdings, provided that Terra Entity may receive a credit to its capital account for expenses paid by Terra Entity. • Community Development District: The CRA has agreed to support a community development district being formed with respect to the Project. The Sixth Amendment, attached hereto as Exhibit "B", dated as of March 31, 2020, and contains, in part, the following modifications: • Extension Fees: The Sixth Amendment provides that the Second Closing Extension Deposit in the amount of $500,000, which is credited to the purchase price, and the Second Additional Consideration in the amount of $300,000, which does not get credited to the purchase price, shall be paid on the Closing Date instead of March 20, 2020. Michael Swerdlow has guaranteed these payments. • Closing Date: The Closing Date has been extended to April 30, 2020; however (i) the Developer shall have the right to extend the Closing Date through June 1, 2020, and if closing has not occurred on or before April 30, 2020, in which case, an extension fee of $100,000, which is not credited to the Purchase Price, shall be earned by the CRA, and Developer shall pay the above extension fee on the Closing Date, as the same may be extended; and (ii) the Developer shall have the additional right to extend the Closing Date through June 30, 2020, conditioned delivery of written notice (which notice may be by email) to the CRA on or before June 1, 2020 and upon Developer paying to the CRA an additional extension fee of $100,00, which is not credited to the Purchase Price and which shall be earned by the CRA as of the date of such extension but payable on the Closing Date. • Assignment Prior to Closing: The assignment provisions of the Fifth Amendment are amended and restated so that the Developer has the right to assign the Development Agreement to, and the CRA agrees to convey the Property to, a new limited liability company to be formed to own the Property ("Property Owner"), and a new limited liability company to be the sole member and owner of the Property Owner ("Member"), provided that Property Owner is one hundred percent (100%) owned by Member and Member is one hundred percent (100%) owned by Developer. The CRA agrees to convey the Property to the Property Owner at closing provided that (a) the Developer is the sole member and owner of Member, (b) Member is the sole member and owner of Property Owner and (c) Michael Swerdlow or an entity he controls retains all decision making with respect to Developer, Member and Property Owner, except for certain major decisions. 2 The Seventh Amendment, attached hereto as Exhibit "C", contains, in part, the following modifications: • Extension of Closing Date: The Developer exercises its additional right to extend the Closing Date through June 30, 2020 in accordance with the Sixth Amendment. The May Extension Fee and June Extension Fee (each, as defined in the Sixth Amendment) are deemed earned by the CRA and are payable on the Closing Date. The Developer and the CRA further agree to extend the Closing Date through September 30, 2020; provided that closing may occur on an earlier date at Developer's election and upon not less than ten (10) days' prior written notice to the CRA of such earlier date. JUSTIFICATION: Florida Statutes, Section 163.370(2)(e)(4) of the Community Redevelopment Act authorizes the disposal of real property. Section 2, Goal 3 on page 11 of the Southeast Overtown/Park West Community Redevelopment Plan ("Plan") lists the "creat[ion of] infill housing, diversity in housing types, and retaining affordable housing, as a stated redevelopment goal. Section 2, Goal 4 and 6 on page 11 of the Plan lists the "creat[ion of] jobs within the community" and "improving quality of life for residents" as stated redevelopment goals. Section 2, Principle 4 on page 14 of the Plan provides that "[t]he neighborhood... retain access to affordable housing..." as a stated redevelopment principle. Section 2, Principle 4 on page 14 of the Plan provides that "employment opportunities be made available to existing residents..." as a stated redevelopment principle. Section 2, Principle 6 on page 15 of the Plan further provides that in order to "address and improve the neighborhood economy and expand economic opportunities of present and future residents and businesses [,] [it] is necessary to support and enhance existing businesses and... attract new businesses that provide needed services and economic opportunities..." as a stated redevelopment principle. FUNDING: The CRA will be paid $18,000,000 plus not less than $330,000 and up to $530,000 in extension fees in connection with the sale. TIF payments will be generated solely from this Project so it will have no negative fiscal impact. 3 Southeast Overtown/Park West Community Redevelopment Agency Legislation CRA Resolution: CRA-R-20-0005 File Number: 7480 Final Action Date:5/28/2020 A RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE SOUTHEAST OVERTOWN/PARK WEST COMMUNITY REDEVELOPMENT AGENCY, WITH ATTACHMENT(S), RATIFYING THE FIFTH AMENDMENT AND SIXTH AMENDMENT, AND AUTHORIZES THE EXECUTION OF THE SEVENTH AMENDMENT TO THE DEVELOPMENT AGREEMENT BY AND BETWEEN THE SOUTHEAST OVERTOWN/PARK WEST COMMUNITY REDEVELOPMENT AGENCY AND DOWNTOWN RETAIL ASSOCIATES, LLC, ATTACHED AND INCORPORATED HEREIN AS EXHIBIT "A", EXHIBIT "B", AND EXHIBIT "C" RESPECTIVELY, FOR THE DISPOSITION AND DEVELOPMENT OF BLOCK 55; AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE ANY AND ALL DOCUMENTS REQUIRED TO CONSUMMATE THE TRANSACTION. WHEREAS, the Southeast Overtown/Park West Community Redevelopment Agency ("CRA") is a community redevelopment agency created pursuant to Chapter 163, Florida Statutes, and is responsible for carrying out community redevelopment activities and projects within its Redevelopment Area in accordance with the 2009 Southeast Overtown/Park West Community Redevelopment Plan ("Plan"); and WHEREAS, Florida Statutes, Section 163.370(2)(e)(4) of the Community Redevelopment Act authorizes the disposal of real property; and WHEREAS, Section 2, Goal 3 on page 11 of the Plan lists the "creat[ion of] infill housing, diversity in housing types, and retaining affordable housing, as a stated redevelopment goal; and WHEREAS, Section 2, Goal 4 and 6 on page 11 of the Plan lists the "creat[ion of] jobs within the community" and "improving quality of life for residents" as stated redevelopment goals; and WHEREAS, Section 2, Principle 4 on page 14 of the Plan provides that "[t]he neighborhood...retain access to affordable housing..." as a stated redevelopment principle; and WHEREAS, Section 2, Principle 4 on page 14 of the Plan provides that "employment opportunities be made available to existing residents..." as a stated redevelopment principle; and WHEREAS, Section 2, Principle 6 on page 15 of the Plan further provides that in order to "address and improve the neighborhood economy and expand economic opportunities of present and future residents and businesses [,] [it] is necessary to] support and enhance existing businesses and... attract new businesses that provide needed services and economic opportunities..." as a stated redevelopment principle; and WHEREAS, on October 1, 2018 the Block 55 Development Agreement was executed, which was amended by Amendment dated November 21, 2018, by Second Amendment dated April 17, 2019, by the Third Amendment dated September 26, 2019 and by the Fourth Amendment dated as of December 20, 2019 (collectively, the "Development Agreement"), all of which have been previously approved by the CRA Board of Commissioners; and City of Miami Page 1 of 4 File ID: 7480 (Revision: A) Printed On: 9/1/2020 File ID: 7480 Enactment Number: CRA-R-20-0005 WHEREAS, Block 55 will be developed as a mixed -use development consisting of not less than 250,000 square feet of retail, office, restaurant and entertainment uses, and not less than 500 residential units (collectively the "Project"), with twenty percent (20%) of the units to be provided to residents earning fifty percent (50%) or less of the Miami -Dade County Area Median Income; and WHEREAS, the Fifth Amendment, attached hereto and incorporated herein as Exhibit "A", was executed as of March 18, 2020, and contains, in part, the following modifications: • Payment of Incremental Tax Increment Financing ("TIF"): As a development incentive, the CRA shall pay to Developer an incentive payment equal to up to 70% of the incremental TIF generated from this specific Project only, and with use limitations. • Affordable Housing: The Developer has agreed that not less than twenty percent (20%) of the residential units in the Project or approximately 154 units, consisting of a mix of studio and one - bedroom units, will be made available to individuals and families earning fifty percent (50%) or less of the Miami -Dade County Area Median Income. • Retail Opportunity for CRA: The Developer will make available approximately 1,000 rentable square feet for a CRA supported business at 50% of the average total rent. This space will be available for a CRA sponsored tenant for the duration of the life of the CRA. • Space for City/CRA: The Developer will make available to the City or the CRA approximately 1,000 square feet of rentable space at $1.00 per year for use as a police substation Neighborhood Enhancement Tenant office, or such other use specified by the CRA for the life of the CRA. • Extension Fee Dates: The Fifth Amendment provides that the Second Closing Extension Deposit in the amount of $500,000, which is credited against the purchase price, and the Second Additional Consideration in the amount of $300,000, which does not get credited against the purchase price, shall be due on or prior to the Closing Date of March 31, 2020 instead of March 20, 2020. • Assignment Prior to Closing: Developer has the right to assign the Development Agreement to, and the CRA agrees to convey the Property to, a new limited liability company to be formed to own the Property ("Property Owner"), which is 100% owned by a second new limited liability company ("Holdings"), provided that (i) Holdings is the sole member and owner of Property Owner, (ii) Developer owns at least 63% of the ownership interests of Holdings, (iii) an entity controlled by David Martin and Pedro Martin ("Terra Entity") owns the balance of the ownership interests of Holdings, (iv) Michael Swerdlow or an entity he controls retains all decision making in respect of Holdings and Property Owner except for certain major decisions, (v) Developer provides copies of the organizational documents of Property Owner and Holdings confirming the ownership and management and (vi) Terra Entity confirms that it has not paid cash consideration for its interest in Holdings, provided that Terra Entity may receive a credit to its capital account for expenses paid by Terra Entity. • Community Development District: The CRA has agreed to support establishing a community development district with respect to the Project; and WHEREAS, the Sixth Amendment, attached hereto and incorporated herein as Exhibit "B", was executed as of March 31, 2020, and contains, in part, the following modifications: • Extension Fees: The Sixth Amendment provides that the Second Closing Extension Deposit in the amount of $500,000, which is credited to the purchase price, and the Second Additional Consideration in the amount of $300,000, which does not get credited to the purchase price, shall City of Miami Page 2 of 4 File ID: 7480 (Revision: A) Printed on: 9/1/2020 File ID: 7480 Enactment Number: CRA-R-20-0005 be paid on the Closing Date instead of March 20, 2020. Michael Swerdlow has guaranteed these payments. • Closing Date: The Closing Date has been extended to April 30, 2020; however (i) the Developer shall have the right to extend the Closing Date through June 1, 2020, and if closing has not occurred on or before April 30, 2020, in which case, an extension fee of $100,000, which is not credited to the Purchase Price, shall be earned by the CRA, and Developer shall pay the above extension fee on the Closing Date, as the same may be extended; and (ii) the Developer shall have the additional right to extend the Closing Date through June 30, 2020, conditioned delivery of written notice (which notice may be by email) to the CRA on or before June 1, 2020 and upon Developer paying to the CRA an additional extension fee of $100,00, which is not credited to the Purchase Price and which shall be earned by the CRA as of the date of such extension but payable on the Closing Date. • Assignment Prior to Closing: The assignment provisions of the Fifth Amendment are amended and restated so that the Developer has the right to assign the Development Agreement to, and the CRA agrees to convey the Property to, a new limited liability company to be formed to own the Property ("Property Owner"), and a new limited liability company to be the sole member and owner of the Property Owner ("Member"), provided that Property Owner is one hundred percent (100%) owned by Member and Member is one hundred percent (100%) owned by Developer. The CRA agrees to convey the Property to the Property Owner at closing provided that (a) the Developer is the sole member and owner of Member, (b) Member is the sole member and owner of Property Owner and (c) Michael Swerdlow or an entity he controls retains all decision making with respect to Developer, Member and Property Owner, except for certain major decisions; and WHEREAS, the Seventh Amendment, attached hereto and incorporated herein as Exhibit "C", contains, in part, the following modifications: • Extension of Closing Date: The Developer exercises its additional right to extend the Closing Date through June 30, 2020 in accordance with the Sixth Amendment. The May Extension Fee and June Extension Fee (each, as defined in the Sixth Amendment) are deemed earned by the CRA and are payable on the Closing Date. The Developer and the CRA further agree to extend the Closing Date through September 30, 2020; provided that closing may occur on an earlier date at Developer's election and upon not less than ten (10) days' prior written notice to the CRA of such earlier date; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE SOUTHEAST OVERTOWN/PARK WEST COMMUNITY REDEVELOPMENT AGENCY 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 herein as if fully set forth in this Section. Section 2. The Board of Commissioners hereby ratifies the Fifth Amendment, Sixth Amendment, and authorizes the execution of the Seventh Amendment to the Development Agreement between the Southeast Overtown/Park West Community Redevelopment Agency and Downtown Retail Associations, LLC for the disposition and development of Block 55, 249 NW 6th Street, Miami, FL (Folio No. 01-0105-050-1120) as attached hereto and incorporated herein as Exhibit "A", Exhibit "B", and Exhibit "C" respectively, and ratifies and reaffirms the terms of the Development Agreement. City of Miami Page 3 of 4 File ID: 7480 (Revision: A) Printed on: 9/1/2020 File ID: 7480 Enactment Number: CRA-R-20-0005 Section 3. The Executive Director is authorized to execute any and all documents required to consummate the transaction contemplated by the Development Agreement as amended, including, without limitation, a special warranty deed conveying Block 55 (Folio 01-0105-050-1120) to Downtown Retail Associates, LLC or its permitted assigns in accordance with the terms of the Development Agreement, as amended. Section 4. This Resolution shall become effective immediately upon its adoption. APPROVED AS TO FORM AND LEGAL SUFFICIENCY: iver, E -cutive Director 5/22/2020 Chanel H. Jeffert ff Cd ounsel 9/1/2020 City of Miami Page 4 of 4 File ID: 7480 (Revision: A) Printed on: 9/1/2020 Southeast Overtown/Park West Community Redevelopment Agency Legislation CRA Resolution: CRA-R-20-0005 File Number: 7480 Final Action Date:5/28/2020 A RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE SOUTHEAST OVERTOWN/PARK WEST COMMUNITY REDEVELOPMENT AGENCY, WITH ATTACHMENT(S), RATIFYING THE FIFTH AMENDMENT AND SIXTH AMENDMENT, AND AUTHORIZES THE EXECUTION OF THE SEVENTH AMENDMENT TO THE DEVELOPMENT AGREEMENT BY AND BETWEEN THE SOUTHEAST OVERTOWN/PARK WEST COMMUNITY REDEVELOPMENT AGENCY AND DOWNTOWN RETAIL ASSOCIATES, LLC, ATTACHED AND INCORPORATED HEREIN AS EXHIBIT "A", EXHIBIT "B", AND EXHIBIT "C" RESPECTIVELY, FOR THE DISPOSITION AND DEVELOPMENT OF BLOCK 55; AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE ANY AND ALL DOCUMENTS REQUIRED TO CONSUMMATE THE TRANSACTION. WHEREAS, the Southeast Overtown/Park West Community Redevelopment Agency ("CRA") is a community redevelopment agency created pursuant to Chapter 163, Florida Statutes, and is responsible for carrying out community redevelopment activities and projects within its Redevelopment Area in accordance with the 2009 Southeast Overtown/Park West Community Redevelopment Plan ("Plan"); and WHEREAS, Florida Statutes, Section 163.370(2)(e)(4) of the Community Redevelopment Act authorizes the disposal of real property; and WHEREAS, Section 2, Goal 3 on page 11 of the Plan lists the "creat[ion of] infill housing, diversity in housing types, and retaining affordable housing, as a stated redevelopment goal; and WHEREAS, Section 2, Goal 4 and 6 on page 11 of the Plan lists the "creat[ion of] jobs within the community" and "improving quality of life for residents" as stated redevelopment goals; and WHEREAS, Section 2, Principle 4 on page 14 of the Plan provides that "[t]he neighborhood...retain access to affordable housing..." as a stated redevelopment principle; and WHEREAS, Section 2, Principle 4 on page 14 of the Plan provides that "employment opportunities be made available to existing residents..." as a stated redevelopment principle; and WHEREAS, Section 2, Principle 6 on page 15 of the Plan further provides that in order to "address and improve the neighborhood economy and expand economic opportunities of present and future residents and businesses [,] [it] is necessary to] support and enhance existing businesses and... attract new businesses that provide needed services and economic opportunities..." as a stated redevelopment principle; and WHEREAS, on October 1, 2018 the Block 55 Development Agreement was executed, which was amended by Amendment dated November 21, 2018, by Second Amendment dated April 17, 2019, by the Third Amendment dated September 26, 2019 and by the Fourth Amendment dated as of December 20, 2019 (collectively, the "Development Agreement"), all of which have been previously approved by the CRA Board of Commissioners; and City of Miami Page 1 of 2 File ID: 7480 (Revision:) Printed On: 9/1/2020 File ID: 7480 Enactment Number: CRA-R-20-0005 WHEREAS, Block 55 will be developed as a mixed -use development consisting of not less than 250,000 square feet of retail, office, restaurant and entertainment uses, and not less than 500 residential units (collectively the "Project"), with twenty percent (20%) of the units to be provided to residents earning fifty percent (50%) or less of the Miami -Dade County Area Median Income; and WHEREAS, the Fifth Amendment, attached hereto and incorporated herein as Exhibit "A", was executed as of March 18, 2020, and contains, in part, the following modifications: APPROVED AS TO FORM AND LEGAL SUFFICIENCY: 1 s ivecutive Director 512212020 \) City of Miami Page 2 of 2 File ID: 7480 (Revision:) Printed on: 9/1/2020