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HomeMy WebLinkAboutM-77-08314 CITY OF MIAMI. FLORIDA INTER -OFFICE MEMORANDUM TO: FROM: Joseph R. Grassie City Manager John E. Gilchrist Project Director Watson Island DATE October 21, 1977 SUBJECT FILE Proposed Agreement for Watson Island Development REFERENCES ENCLOSURES. Attached is the proposed agreement to be executed between the City of Miami and Diplomat World Enterprises, Ltd. for the development and operation of Watson Island. The City Manager was authorized,by Resolution #77-671 of July 28, 1977, to execute a contract in accordance with the terms and conditions of the developer -operator agreement outlined by and between the City of Miami and Diplomat World Enterprises contained in that resolution. 4Ti4 77-- P3 f I�Il�Ilil'�1RI1PIII�1I p!IP1iIll!!r!'� AGREEMENT THIS AGREEMENT, made and entered into this day of 1977, by and between the CITY OF MIAMI, a municipal corporation under the laws of the State of Florida (hereinafter the "CITY") , and DIPLOMAT WORLD ENTERPRISES, LTD., a limited partnership under the laws of the State of Florida (hereinafter "DIPLOMAT"). W I T N E S S E T H: WHEREAS, by Resolution No. 77-671, dated the 28th day of July, 1977, the City has determined that there exists an urgent public need to provide a major park development facility in order to assist, improve and fulfill critical economic, sports, recrea- tional, commercial and tourist development needs of the City and its citizens, which park development will also be of similar benefit to Dade County and the State of Florida; and WHEREAS, extensive expert studies and recommendations have established that the best location for such a major park development is the City -owned Watson Island, more particularly described on Schedule "A" (hereinafter the "Property"), including any expansions, additions and extensions, together with riparian rights to the Property; and WHEREAS, to accomplish these unique Development -Operator • functions, it was determined to undertake a nationwide search and public bid process to obtain a qualified Developer -Operator at the best available terms and conditions; and WHEREAS, the City determined that Diplomat is the Developer - Operator which is qualified to undertake the Development and Operation of the Property and therefore best meet the needs and goals of the City, as set forth above; and WHEREAS, each party hereto desires to enter into an agreement with regard to the Property under the terms and conditions set forth hereinafter; NOW, THEREFORE, for and in consideration of the mutual covenants and undertakings hereinafter set forth and the considera- tions hereinafter expressed, the parties do agree as follows: 1. The CITY hires DIPLOMAT to do or cause to be done the Planning, Developing and Operating of the PROPERTY and, in connection therewith, to use its best efforts to cause the Financing. It is contemplated that the improvements on the PROPERTY will include an amusement theme park, marine facilities, international bazaar, convention facilities, parking and other related activities. The aforesaid services shall be referred to as the "WORK", and DIPLOMAT agrees to perform the WORK in a good and capable manner, as set out hereinbelow. 2. (a) "Planning" as used herein shall mean: (i) the obtaining from recognized professional design, architectural, construction, engineering and economic consultants of information relevant to preparing an overall design concept and budget for the WORK; (ii) the obtaining of preliminary drawings and financial feasibility reports acceptable to the underwriter as such underwriter is hereinafter defined; (iii) all other activities necessary to determine the type, character and dimension of the improvements to be placed upon the PROPERTY; and (iv) all other activities relating to plans for Developing the PROPERTY. (b) "Financing" as used herein shall mean the obtaining of an underwriter or underwriters satisfactory to the CITY to underwrite an amount presently estimated at Fifty-five Million Dollars ($55,000,000) of bonds or certificates of indebtedness of the CITY, which shall be secured by a pledge by the CITY, first, of the Gross Revenues less Current Obligations of the PROPERTY and, second, by a' (e) non ad valorem taxes and franchise fees which are not otherwise pledged sufficient to meet the Debt Service on an amount of bonds or certificates of indebtedness not to exceed Twenty 'Million Dollars ($20,000,000) , and all things necessary to accomplish the commitment of such moneys from lenders and the closing and funding of such loan, and all such other activities relating to obtaining moneys for Development of the PROPERTY. Nothing herein shall be construed to require a pledge of ad valorem taxes. However, subject to the financial feasi- bility and the approval of the CITY, as herein defined, it may be necessary and desirable to issue, without further guarantee by the CITY, additional revenue bonds or to obtain other means of financing the PROPERTY and/or to separately finance or fund individual segments of the development from other sources, including the unsubordin- ated ground leasing of portions thereof. It is further understood that any additional financing or leasing arrangements under this paragraph shall be designed to enlarge and enhance the public purpose of this project, as set forth in this Agreement. (c) "Developing" and "Development" as used herein shall mean the arranging for and implementing and causing of the construction of all improvements resulting from the Planning that are the subject of the Financing afore - described. (d) "Operate" and "Operating" as used herein shall mean the Management and supervision of the PROPERTY. "Current Obligations" as used herein shall mean the expenses of whatever type or character, whether related to Planning, Financing, Developing or Operating, including, without limiting the generality of the foregoing, all taxes and governmental charges or fees, but excluding Debt Service Charges as defined below, which, in accordance with good accounting practice, would be so described. ¢�E i;�'R��9IdRlA��IIIIIIIIII 01l 11 I'll ll'1 " 3 (f) "Debt Service Charges" as used herein shall mean the amount necessary to pay all interest and amortization on the Financing and all other debts, loans or obliga- tions incurred with respect to the PROPERTY. (g) "Gross Revenues" as used herein shall mean all revenues (less sales taxes) received by DIPLOMAT and/or the CITY with respect to the Operation of the PROPERTY. (h) "Costs" as used herein shall mean: (i) all hard costs; (ii) all soft costs; (iii) all advertising and promotional expense; (iv) all charges, costs, interest and fees relating to Financing; (v) developer overhead attributable to the WORK (exclud- ing, however, concessions or fees to DIPLOMAT for construction of improvements referred to in Article 2(c) above); (vi) working capital for opening costs, payroll and related costs; (vii) reserve funds and contingency funds required by the bond underwriter or underwriters; (viii) costs of relocation of: (a) Chalk Seaplane facility now on the PROPERTY; (b) Heliport now on the PROPERTY; (c) Non-profit marine clubs now on the PROPERTY; (d) Japanese International Gardens now on the PROPERTY; (ix) all insurance premiums, including but not limited to public liability insurance, property damage, product and food liability, marine, special event and fire and extended coverage insurance; (x) all miscellaneous expenses necessary for Planning, Financing, Developing and Operating the PROPERTY. (xi) Current Obligations, Debt Service Charges and Replacement Reserves. ( ) "Replacement Reserves" as used herein shall mean those reserves reasonably required for maintenance of improve- ments, addition of attractions or additional improvements, based upon sound business practice and made in accordance with good accounting practi..ce. (j) "Management" as used herein shall mean the direction of the enterprise contemplated hereby and it shall include every power necessary or proper to conduct and carry on the business described in Article 1 hereinabove. (k) "Municipal Taxes" as used herein shall mean all City taxes City government charges other than direct service fees of the CITY, but including City ad valorem taxes. "Project" as used herein shall mean all improvements placed in, on, over, under, or upon the PROPERTY. "Commencement Date" as used herein shall mean that date when DIPLOMAT shall have caused substantial completion of development and DIPLOMAT shall have commenced Operation of the PROPERTY. "City" as used herein shall mean the appropriate official or branch of the CITY government, including the City Com- mission, as required by the Charter or Code of the CITY to take whatever action is required by the terms of this Agreement. 3. Within one hundred eighty (180) days from the execution of this Agreement, DIPLOMAT shall cause the completion of such Planning as is defined in Article 2(a), sub -paragraphs (i) and (ii) above, and shall submit such material to the CITY. The CITY shall thereupon promptly review such Planning and notify DIPLOMAT that it approves the material in whole, or that it does not approve. The CITY shall specify what portions of such Planning it does not approve and with regard to such portions, it shall submit recommendations to DIPLOMAT simultaneously with such notification. If the CITY shall not approve such Planning in whole, DIPLOMAT shall have forty-five (45) days from the notification of such disapproval in which to modify such Planning (n) - 5 to obtain such approval. 4. DIPLOMAT shall be responsible for the payment of all expenses through the date that the CITY receives an underwriter's bond com- mitment or commitments, such payment to he for expenses for those services outlined in Article 2(a) above and to include, but not be limited to, the following: (a) Design, architectural and engineering fees and expenses; (b) Economic consultant's fees and expenses; (c) Legal fees and expenses; (d) Underwriters' fees and expenses; (e) Other consultants' fees and expenses; (f) Documentation and reimbursable expenses; (g) Travel and communication costs; (h) Supplies and miscellaneous related expenses. Subsequent to the date the CITY receives the Underwriter's Bond Commitment letter, all Costs expended by DIPLOMAT shall be charged to the CITY's account and reimbursed from the proceeds of the bond sale, or interim financing, or other CITY funds. 5. At such time as the funding of the Financing or any interim loan shall have occurred, DIPLOMAT shall, subject to the approval of the CITY, cause the preparation of, or obtain: (a) construction working drawings; (b) final construction specifications; (c) complete bidding documents; (d) cost estimates; .,,,_,(e) approvals and permits from all governmental authorities having jurisdiction over the PROPERTY (other than those enumerated in Article 19, which the CITY shall have obtained in CITY's name). 6. As soon as the above shall have been completed, DIPLOMAT shall, subject to the approval of the CITY: (a) advertise in the name of the CITY for construction bids in accordance with the drawings, specifications and documents described in Article 5; (b) evaluate and recommend to the City Commission contractors as a result of such bids; - 6 - (c) obtain required permits for Development (other than those enumerated in Article 19, which the CITY shall have obtained in CITY's name); (d) provide an affirmative action program; (e) supervise Development and obtain Certificates of Occupancy upon completion of construction of any improvements. 7. With the prior approval of the CITY, as herein defined, DIPLOMAT shall be primarily responsible for the day to day operation of the PROPERTY, excepting those segments agreed upon by the parties hereto, and may as Agent for the CITY: (a) sub -divide, develop, improve, manage, operate or use, all or any part of the PROPERTY in accordance with the approved plans; (b) lease all or any part of the PROPERTY in accordance with the approved plans, which leasing is intended to support and be ancillary to the Operation; (c) grant easements or rights -of -way in accordance with the approved plans; (d) borrow money and incur other obligations for the Develop- ment and Operation of the facilities in the approved plans; (e) draw, make, accept, endorse, sign and deliver any notes or other negotiable instruments or commercial paper; (f) prepay, in whole or in part, re -finance, re -cast, increase, modify, consolidate or extend any unsubordinated mortgage or security interest affecting all or any part of the PROPERTY; (g) become a surety, guarantor, indemnitor, or accommodation party to any obligation; (h) establish, maintain and draw upon checking, savings and other accounts and designate others to draw upon any such accounts; (i) employ, fix the compensation of, oversee and discharge agents and employees; (j) enter into approved construction, or other contracts; (k) enter into contracts for management of real or personal property; 7 (1) make any tax elections under I.R.S. regulations; (m) make or cause to be made surveys, studies, etc. to determine highest and hest use of the PROPERTY; (n) make and/or change the accounting year; (o) execute, acknowledge, verify and deliver any instruments desirable to effectuate the above; (p) to do any or all of the above through agents selected by DIPLOMAT; (q) to do any and all things as shall be required or desirable in order to implement the foregoing. 8. From and after the Commencement Date, DIPLOMAT shall have the right of Operating (which shall, from and after the Commencement Date, include Planning, Financing, Developing and Operating) the PROPERTY for a period of thirty (30) years. 9. The CITY confers to DIPLOMAT an option to Operate the PROPERTY for an additional period of ten (10) years, to commence immediately upon the expiration of the thirty (30) year period referred to above, and upon the same terms and conditions as in this Agreement provided. Such option shall be exercisable by DIPLOMAT tendering to the CITY written notice of its election to exercise its option at least one (1) year prior to the expiration of the thirty (30) year period referred to above. 10. The parties agree that if DIPLOMAT has exercised the option conferred in Article 9 above, they shall, on or before the expiration of the nineth (9th) year of the option term, meet for the purpose of negotiating a further extension for a period of twenty (20) years, and each party shall bargain in good faith to negotiate such extension, but this provision shall not be subject to arbitration as provided below. If the parties shall mutually agree to this extension, this twenty (20) year period shall commence immediately upon the expiration of the option term as designated in Article 9 above. Notwithstanding anything to the contrary contained above, however, at the expiration of the nineth (9th) year of this twenty (20) year period described in the immediately preceding paragraph, the parties 1 agree that they shall bargain in good faith to negotiate Revenue Distribution as defined hereinafter for the period commencing on the tenth (loth) anniversary of such option period and for the remaining term thereof. If they shall be unable to negotiate a mutually satis- factory Revenue Distribution, the option period shall terminate on the •aforesaid tenth (loth) anniversary, notwithstanding the term thereof. 11. The parties agree that each of the parties shall receive as consideration for the obligations imposed upon each of them hereunder, after all Current Obligations, Debt Service Charges and Replacement Reserves have been deducted from Gross Revenues, in the order listed the following: (a) The CITY shall receive an amount equal to two percent (2%) of Gross (b) DIPLOMAT of Gross (c) The CITY of Gross (d) DIPLOMAT of Gross (e) DIPLOMAT Revenues. shall receive an amount equal to two percent (2%) Revenues. shall receive an amount equal to two percent (2%) Revenues. shall receive an amount equal to two percent (2%) Revenues. shall receive an amount equal to: (i) three percent (3%) of all Gross Revenues if such Gross Revenues shall be $20,000,000 or less per annum; (ii) four percent (4%) of all Gross Revenues if such Gross Revenues shall be $30,000,000 or less per annum; (iii) five percent (50) of all Gross Revenues if such Gross Revenues shall be $40,000,000 or less per annum; (iv) six percent (6%) of all Gross Revenues if such Gross Revenues shall be $50,000,000 or less per annum; (v) seven percent (7%) of all Gross Revenues if such Gross Revenues shall he $60,000,000 or less per annum; and (vi) eight percent (80) of all Gross Revenues if such Gross Revenues shall exceed $60,000,000 per annum. (f) The CITY shall receive any remaining moneys that shall be earned during such annual period. - 9 - All of the foregoing (herein called "Revenue Distribution") shall be paid annually (each such period being herein called "Annual Period"), with the first Revenue Distribution to be made on the first (1st) anniversary of the Commencement Date and thereafter, on each subsequent anniversary. If DIPLOMAT shall request, a portion of any year may be prorated and an accounting year thereafter established. The portion of such year and each accounting year shall each be con- sidered Annual Periods, and any portion of the year at the completion of the term shall also be considered an Annual Period. Each Annual Period shall be considered as an independent accounting period for the purposes of computing the amount of Revenue Distribution payable to the parties and Gross Revenues shall never be carried over from one Annual Period to another. 12. DIPLOMAT agrees to Operate the PROPERTY in accordance with standards established by comparable facilities in the United States. Toward this end, DIPLOMAT shall use its best efforts to Operate the PROPERTY so that Current Obligations, excepting taxes and governmental charges or fees, shall approximate sixty-seven percent (67%) of Gross Revenues (hereafter, that fraction resulting from annual Current Obligations, excepting taxes and governmental charges or fees, as numerator, and annual Gross Revenues as denominator, is referred to as "ratio"). In the event that during any Annual Period, DIPLOMAT shall not achieve such ratio, DIPLOMAT agrees to reduce its Revenue Distribution as provided in Article 11, sub -paragraph (e) above, one-half of one percent (.50) for each percentage point of increase up to a ceiling ratio of seventy-one percent (710). In the event that during any Annual Period, DIPLOMAT shall conduct such Operation at a ratio of less than sixty-seven percent (67a), its Revenue Distribution shall be in- creased by one-half of one percent (.50) for each four (4) percentage points of decrease of the ratio. DIPLOMAT shall provide in its annual operating budget for the Amusement Them Park Area, an amount of no less than five -percent (5a) of said budget, for live show entertainment and presentations of all types, including cultural activities and functions. -1U- 13. The CITY agrees during the period of Operation by DIPLOMAT to promote the Operation and the PROPERTY in City advertising, and to provide adequate directional signs, traffic control and off -site security relating to parking and ancillary facilities associated with the PROPERTY, as defined below, for visitors, guests and invitees of the PROPERTY. 14. The CITY agrees that it shall, at times and in a manner not to impede the Development of the PROPERTY, install, place or erect, as the case may be, upon the PROPERTY in accordance with the construc- tion working drawings and final construction specifications approved by the CITY, each of the following: (a) Sanitary sewer, storm sewer, water, electric and gas lines. (b) Paved surface parking for approximately 2,600 cars. (c) On -off access ramps and roadways from the PROPERTY to MacArthur Causeway; and traffic signals as may be required from such ramps and roadways. (d) Pedestrian overpass and service roads. (e) Ferry docking slips. (f) Wharf docking area. (g) Bulkheading and shoreline improvements for marine facilities. (h) Relocation and regrading of MacArthur Causeway as, if and when it may be relocated upon the PROPERTY, subject to availability of funds. (i) Site work and fill as may be required by design and appli- cable flood criteria of governmental authorities having jurisdiction thereover. The CITY agrees to use its best efforts to obtain funds for the purpose of causing each and all of the above specified items to be completed in a good and workmanlike manner. In the event, however, that the CITY shall be unable to obtain all such funds or a commitment therefor at the time that DIPLOMAT shall have completed items (a) through (d), inclusive, of Article 5 above, it may provide for the allocation from the proceeds of such Financing an amount not to exceed $6,000,000 for the purpose of accomplishing the foregoing. If the CITY desires to utilize the provisions of this Article, it shall notify DIPLOMAT and the underwriter or underwriters described in Article 2(h) above, at the time that DIPLOMAT shall have performed the obligations imposed upon DIPLOMAT under Article.4 above. 15. This Agreement established DIPLOMAT as the Planner, Financial Consultant, Developer and Operator of the PROPERTY, and any person dealing with DIPLOMAT shall have the right to rely fully on its power and authority to bind the Project, excepting, however, that DIPLOMAT shall never have the authority to encumber the real property or to cause Financing of the PROPERTY except as in this Agreement provided. The parties intend that DIPLOMAT be an independent contractor and not an employee of the CITY, and the employees and agents of DIPLOMAT shall attain no rights or benefits under the Civil Service or Pension Ordinances of the CITY, nor any rights generally afforded classified or unclassified employees of the CITY, nor shall DIPLOMAT or its employees be entitled to Florida Workmen's Compensation benefits as an employee of the CITY. It is intended that the CITY shall permit DIPLOMAT to Operate the PROPERTY without interference in day to day Management. however, from time to time, the CITY may monitor the business conducted on the PROPERTY and assure itself as to DIPLOMAT's Management thereof. 16. DIPLOMAT agrees that it shall cause to be kept complete and accurate books and records relating to Planning, Financing, Development and Operating the PROPERTY in accordance with generally accepted accounting practice, at the principal office of DIPLOMAT located in Dade County. Independent Certified Public Accountants, mutually agree- able to the CITY and DIPLOMAT, shall be selected from time to time by the parties and such Certified Public Accountants shall perform such services as to the two parties shall appear adequate for the purpose of determining Current Obligations, Debt Service Charges, Gross Revenues Costs, Replacement Reserves, and such other information relating to revenues and disbursements as may be relevant to the business of DIPLOMA' and the ;fork on the PROPERTY. 12 - 17. In all of the foregoing undertakings, DIPLOMAT shall have no liability to third persons other than as specifically set forth herein, if the CITY shall request DIPLOMAT to execute contracts, hire employees, incur expenses or any liability whatsoever, the CITY shall fully indemnify DIPLOMAT therefor. 18. The CITY shall, when Financing or interim loans are obtained in accordance with this Agreement, act expeditiously to: (a) cause execution and implementation of funding; and (b) from time to time, when requested by DIPLOMAT, make payments or cause them to be made where such payments are related to Planning, Financing, Developing or Operating the Work. The CITY agrees that it shall accept any reasonable or customary covenants and limitations imposed by any underwriter or lender as to such Financing. 19. From and after the execution of this Agreement, at the request of DIPLOMAT and subject to the availability thereof, the CITY shall make available to DIPLOMAT those of the CITY's administrative resources and staff as may be necessary for the purpose of assisting DIPLOMAT in the orderly Development of the Work. In this regard and without limiting the generality of the foregoing, the CITY shall use its best efforts to assist DIPLOMAT to obtain approvals from the following (if requested by DIPLOMAT): (a) Florida Department of Environmental Regulation (DER). (b) Florida Department of Natural Resources (DNR)(through DER). (c) Florida Department of Administration - in association with the South Florida Regional Planning Council (DRI). (d) Florida -South Florida Water Management District. (e) Florida Department of Transportation (DOT)(including relocation of MacArthur Causeway, Watson Island portion). (f) U.S. Corps of Engineers (COE). (g) U.S. Coast Guard and Dade County Port Authority. (h) U.S. Federal Aviation Agency (FAA). (i) Metropolitan Dade County. The CITY shall, free of cost, obtain approvals of ail licenses, petmits, and the like, required from Departments of the CITY. Not- withstanding anything to the contrary in this Article contained, DIPLOMAT shall have the primary responsibility to obtain the approvals enumerated in this Article as sub -paragraphs (a) through (i), inclusive. 20. DIPLOMAT shall supervise the Development of the Work and cause the completion thereof with reasonable dispatch, having regard for the complexity and size of the business venture contemplated under this Agreement. The CITY recognizes that DIPLOMAT may utilize "fast track" construction methods, and the CITY, if requested by DIPLOMAT, agrees to cooperate and assist DIPLOMAT so that such method may be effectively used. 21. Many of the provisions in this Agreement require one of the parties to act or notify the other without specifying the time allowed therefor. Each party agrees that the other shall have a reasonable time to accomplish such act or provide such notification, giving con- sideration to the attendant circumstances in each case. 22. Many of the provisions of this Agreement require that approval be obtained by one party from the other to a plan, program, recommenda- tion, or proposed act. No such approval shall be either unreasonably (a) delayed, or (b) withheld. To accelerate action, the CITY shall promulgate legislation to confer upon a municipally created authority, ex officio committee and/or the City Manager, the power and authority to give or withhold consents, and the DIPLOMAT and any third persons may rely upon such consents. The CITY agrees that the City Manager may appoint the Project Director for Watson Island to assist the City Manager in the functions aforedescrihed. In the event that a municipal authority is created, the City Manager shall serve as Chairman of the Board of such authority, and the City Attorney and Project Director shall constitute the membership of said Board. 1 41 23. Immediately upon execution of this Agreement, the CITY shall make application to all governmental authorities having jurisdiction thereover for the purpose of commencing priority studies for design and construction of a people mover system for the PROPERTY connecting to (a) the Downtown People Mover System, Phase I, (h) the proposed Waterborne Transportation System, (c) shuttle bus routes throughout Dade County, and (d) off -site parking facilities. Thereafter, at the request of LIPLOMAT, the CITY shall make such applications, or authorize DIPLOMAT so to do, for the purpose of providing orderly and effective road, water or other transportation systems to and from the PROPERTY during the term of this Agreement. 24. The CITY shall provide to the Project, on a best efforts basis, any equipment, land, supplies and services reasonably available and not otherwise committed without charge, and the CITY shall provide all services which the CITY provides to the City's taxpayers, off -site storage facilities, warehouse, nursery, shop, disposal, maintenance, dockage facilities, and such other services not otherwise committed which are beneficial to the Development and Operation of the PROPERTY and which are likely to reduce the cost of Development and Operation. 25. Throughout the term of this Agreement, the CITY may have avail- able to it funds, grants, services, or guarantees from other governmental authorities which will, or might in the judgment of DIPLOMAT, enhance the PROPERTY, the Work, or the Operation. When requested by DIPLOMAT, the CITY shall (so long as the CITY shall not be required to expend any moneys of the CITY) make such applications or authorize DIPLOMAT to so do in the CITY's name, and to use such funds, grants, services and guarantees for promoting the successful Planning, Financing, Development and Operation of the PROPERTY. If any such benefit shall become avail- able prior to the Commencement Date of the term, DIPLOMAT may amend any documents relating to Planning, Financing or Development, or cause their amendment for the purpose of utilizing such benefits and/or utilizing so much of the $55,000,000 Financing referred to in Article 2, sub- paragraph (b) above, as shall be saved thereby for further enchancing the PROPERTY. - 15 - 26, Inasmuch as DIPLOMAT shall operate the business known as the PROPERTY for an extensive period of time during which changes may occur by reason of (a) alterations of methods of merchandising, (b) partial or total damage or destruction, or (c) eminent domain, the parties agree that DIPLOMAT sha 11 have the power and authority from time to time to (a) maintain or upgrade all or any part of the improvements on the PROPERTY, and (h) replace, rebuild, build or enlarge any improvements on the PROPERTY. Provided, however, that if such maintenance, upgrading, replacement, rebuilding, building, or enlargement is substantial, (a) the format established in Article 5, 6, and elsewhere in this Agreement, shall be followed, and (b) new financing shall he obtained mutually agreeable to the parties, but the CITY agrees that if such Financing shall not increase its obliga- tions to be secured by franchise and utility fees as described above, and upon reasonable projections supported by expert analyses will not materially adversely affect the projected Revenue Distribution to the CITY for the balance of the term of this Agreement, or this Agreement as extended (if DIPLOMAT shall have exercised the option described in Article 9 above), and that such new Financing shall be agreeable to the CITY. "New Financing" as used in this Article shall not be limited as provided in Article 2, sub -paragraph (b) above. 27. The CITY agrees that if bond counsel selected by the CITY for 'the Financing shall require a ruling from the Internal Revenue Service prior to issuing its validating opinion letter to the underwriter or underwriters, then the CITY shall promptly notify DIPLOMAT thereof and ninety (90) days from the date that the CITY shall have received notice by its bond counsel of such requirement, DIPLOMAT may suspend further action or proceed as in this Agreement provided. If DIPLOMAT so proceeds, all expenses of any type and character from such date shall he deemed to he Costs incurred after the obtaining of a bond commitment or commitments under Article 4 above. 16 - -1 wa If the said bond counsel shall not issue an opinion that the proposed bond issue or issues is/are exempt from taxation under the Internal Revenue Acts, then in effect, DIPLOMAT may elect to sell the reports, documents and information prepared by DIPLOMAT, or caused to be prepared by DIPLOMAT, as provided in Article 2(a) above, to the CITY, and the CITY agrees to purchase said material at a price equal to ninety percent (90%) of all payments and disbursements and Costs of whatever type and character paid, advanced or incurred by DIPLOMAT for the Work or any portion thereof. Notwithstanding the above, however, DIPLOMAT may elect to submit to the CITY recommendations for financing, even though the said bond counsel shall not issue his opinion of tax exempt status, and the CITY shall approve such financing if it shall be in substantial accordance with Financing as defined in Article 2(b) above. Throughout the term of this Agreement, the limitation of obligation of DIPLOMAT to the CITY shall be in the amount that the CITY has authorized as aforedescribed. 28. DIPLOMAT shall keep the CITY informed on the status of the Planning described in Article 2(a)(i) above. 29. This Agreement has been drawn by the parties in the form of an agreement for Planning, Financing, Developing and Operating the PROPERTY. However, at the request of DIPLOMAT, the CITY agrees that it will agree to change the relationship to that of a lessor -lessee, provided that the CITY shall not be detrimentally affected in any way by such change, and provided that the intent as expressed herein may be substantially achieved thereby. 30. It is contemplated that inasmuch as the PROPERTY is owned by the CITY, no municipal taxes, present or future, will be assessed thereon. However, in the event that the highest court of competent jurisdiction shall determine that any taxes imposed by the CITY are due on the PROPERTY, they shall be considered as payment in lieu of an equal amount due to the CITY under Article 11(a), (c) and (f) herein - above, and thereby deducted solely from the CITY's Revenue Distribution, - 17 - 1 Therefore, for the purposes of Revenue Distribution, any municipal taxes shall be considered Revenue Distribution made to the CITY in the amount of such taxes and shall reduce the CITY's Revenue I)istri- bution notwithstanding anything to the contrary herein provided. 31.. The parties hereto agree to deliver promptly as needed, all instruments and documents necessary to effectuate the obligations and agreements of the parties hereto, one unto the other, and each party represents and warrants that it has full power and authority to enter into this Agreement and assume and perform all of the obliga- tions on its part to be performed hereunder. 32. Each party may waive the strict performance of any covenant, condition or representation made hereunder with approval of the other party. Any such waiver, however, shall be made in writing, and waiver of one covenant, condition or representation shall not be considered a waiver of any other covenant, condition or representation. 33. The CITY shall not sell or transfer the PROPERTY or assign this Agreement, in whole or in part, except to another governmental agency and only as permitted by the bondholders after legal request for such consent by the CITY, and only if such assignment shall have no adverse effect on the position of DIPLOMAT. 34. The CITY shall obtain or furnish to DIPLOMAT at the PROPERTY all utilities (including, without limiting the generality of the fore- going, electricity, sanitary sewerage, water, gas) at the CITY's net bulk volume cost. 35. DIPLOMAT agrees to be and remain an equal opportunity employer throughout the term of this Agreement. 36. Notices relating to this Agreement shall be in writing by Certified Mail, Return Receipt Requested, to the names and addresses of each of the parties listed below, or to such other names and addresses as may be determined from time to time: TO THE CITY: TO DIPLOMAT: City of Miami City Hall 3500 Pan American Drive Miami , Florida 33133 Attention: City Manager Diplomat World Enterprises, Ltd. 1212 City National Bank Building Miami, Florida 33130 Attention: Ronald L. Fine, General Partner 37. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall he settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award may be entered in any court having juris- diction thereof. 38. The CITY may require that contractors doing business with DIPLOMAT or the CITY at the PROPERTY, or recommended by DIPLOMAT for Mork thereon, be bondable, that is, able to obtain bonds for performance and payment on Work for which they contract, and the CITY may compel such contractors to be so bonded. 39. The parties hereto intend that this Agreement may and if any part or provision is determined by a court of highest jurisdiction to he inoperative, ineffective, or null and void, then the balance of this Agreement shall remain in full force and effect. 40. Upon the issuance of a bond or Financing commitment or commit- ments, DIPLOMAT may assign this Agreement and the rights and obliga- tions contained herein to a corporation, which shall initially have as its shareholders only those parties who arc partners of DIPLOMAT. The control of such corporation, however, shall be limited during the term of this Agreement, or this Agreement as extended, to the following classes: (a) Family members and lineal descendants of partners of DIPLOMAT (hereinafter "Partners"). (b) Personal representatives or heirs of Partners, or their successors. (c) Such other persons, associations or corporations as shall be permitted by the CITY, which permission the CITY shall not unreason- ably refuse or withhold. Upon the assignment to the corporation and the assumption by that corporation of DIPLOMAT's obligations, the obligations of DIPLOMAT shall cease. be severable, - 19 - 41. The parties agree to make any reasonable modifications to this Agreement which will not materially adversely affect either of them, if requested so to do by any underwriter of the Financing or any lender. 42. In the event that the Planning, Financing, Development and Operation of the PROPERTY shall be delayed, hindered or prevented by. reason of Acts of God, strikes, lock -outs, labor troubles, inability to procure materials, failure of power, restrictive governmental laws or regulations, riots, insurrection, war, or other reasons of a like nature, not the fault of the CITY or DIPLOMAT, then the dates for completion of the Planning, Financing, Development and Operation of the PROPERTY may be extended to a time reasonably necessary to provide for such completion, taking into consideration the circumstances that may exist. 43. Many of the foregoing provisions of this Agreement contain obligations on the part of the CITY or DIPLOMAT or both. In many instances, various rights are granted to each party consequent upon default by the other party in the performance of said obligations. It is expressly understood and agreed that, notwithstanding anything herein contained to the contrary (except as otherwise provided in this Article 43), each and every one of said rights on the part of either party to take advantage of a failure on the part of the other party to fulfill its said obligations shall be subject to the following limitations: (a) DIPLOMAT shall not have the right to proceed with any suit or to avail itself of any remedy whatsoever provided for in this Agreement or under the law, unless DIPLOMAT shall have given to the CITY written notice of the alleged default, and the CITY for a period of ten (ID) days thereafter shall have failed to correct the alleged default. If the alleged default is of such a nature that it cannot be completely remedied or cured within such ten (10) day period, then 20 - such default shall not be an enforceable default against the CITY, if the CITY shall have commenced curing such default within such ten (10) day period and shall proceed with reasonable diligence and good faith to complete the curing thereof. The ten (10) day notice provision herein set forth shall be inapplicable to any emergency. (b) The CITY shall not have the right to proceed with any suit or to avail itself of any remedy whatsoever provided for in this Agreement or under the law, nor shall DIPLOMAT's right to exercise any option granted herein he deemed to have expired, unless the CITY shall have given to DIPLOMAT written notice of the alleged default or the failure to exercise any option, and DIPLOMAT for a period of ten (10) days thereafter shall have failed to correct the alleged default or to exercise said option. If the alleged default or failure to exercise any option is of such a nature that it cannot be completely remedied or cured or exercised within such ten (10) day period, then such default or failure to exercise shall not be deemed an enforceable default or failure of LIPLOMAT, if DIPLOMAT shall have commenced curing such default or undertaken to exercise said option within such ten (10) days period and shall proceed with reasonable diligence and good faith to complete the curing and/or exercising thereof, as the case may be. 44. This Agreement shall be binding upon the parties hereto, their personal representatives, successors and assigns. - 21 - IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written. CITY OF MIAMI (SEAL) By City Manager ATTEST: City Clerk DIPLOMAT WORLD ENTERPRISES, LTD. (SEAL) By Signed, sealed and delivered in the presence of: As to CITY As to DIPLOMAT APPROVED AS TO FORM AND CORRECTNESS• George F. Knox, Jr., ity Attorn 22 p General Partner