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HomeMy WebLinkAboutCC 2017-05-30 Agenda PacketCity of Miami City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com / G1�Y of �r * I N C 0 R P ORATED 7� 18 96 Meeting Agenda Tuesday, May 30, 2017 10:00 AM Special Meeting City Hall City Commission Tomas Regalado, Mayor Keon Hardemon, Chair Ken Russell, Vice Chair Wifredo (Willy) Gort, Commissioner, District One Frank Carollo, Commissioner, District Three Francis Suarez, Commissioner, District Four Daniel J. Alfonso, City Manager Victoria Mendez, City Attorney Todd B. Hannon, City Clerk City Commission Meeting Agenda May 30, 2017 ANY PERSON WHO ACTS AS A LOBBYIST PURSUANT TO CITY OF MIAMI ORDINANCE NO. 11469, CODIFIED IN CHAPTER 2, ARTICLE VI OF THE CITY CODE, MUST REGISTER WITH THE CITY CLERK, PRIOR TO ENGAGING IN LOBBYING ACTIVITIES BEFORE CITY STAFF, BOARDS, AND COMMITTEES AND THE CITY COMMISSION. A COPY OF SAID ORDINANCE IS AVAILABLE IN THE OFFICE OF THE CITY CLERK, CITY HALL. ANY PERSON OR ENTITY REQUESTING APPROVAL, RELIEF OR OTHER ACTION FROM THE CITY COMMISSION OR ANY OF ITS BOARDS, AUTHORITIES, AGENCIES, COUNCILS OR COMMITTEES CONCERNING ANY ISSUE, SHALL DISCLOSE IN WRITING, AT THE COMMENCEMENT (OR CONTINUANCE) OF THE HEARING(S) ON THE ISSUE THE FOLLOWING INFORMATION: 1. WHETHER ANY CONSIDERATION HAS BEEN PROVIDED OR COMMITTED, DIRECTLY, OR ON ITS BEHALF, TO ANY ENTITY OR PERSON FOR AN AGREEMENT TO SUPPORT OR WITHHOLD OBJECTION TO THE REQUESTED APPROVAL, RELIEF OR ACTION; 2. TO WHOM THE CONSIDERATION HAS BEEN PROVIDED OR COMMITTED; 3. THE NATURE OF THE CONSIDERATION, AND 4. A DESCRIPTION OF WHAT IS BEING REQUESTED IN EXCHANGE FOR THE CONSIDERATION. THE DISCLOSURE FORM WHICH IS AVAILABLE FROM THE CITY CLERK MUST BE READ INTO THE RECORD BY THE REQUESTING PERSON OR ENTITY PRIOR TO SUBMISSION TO THE SECRETARY/CLERK OF THE RESPECTIVE BOARD. PURSUANT TO SECTION 4(g)(5) OF THE CHARTER OF MIAMI, FLORIDA, THE MAYOR MAY VETO CERTAIN ITEMS APPROVED BY THE CITY COMMISSION WITHIN TEN CALENDAR DAYS FOLLOWING THE COMMISSION ACTION. THE COMMISSION MAY, AFTER THE VETO OCCURS, OVERRIDE SUCH VETO BY A FOUR-FIFTHS VOTE OF THE COMMISSIONERS THEN PRESENT. ANY PERSON MAKING IMPERTINENT OR SLANDEROUS REMARKS OR WHO BECOMES BOISTEROUS WHILE ADDRESSING THE COMMISSION, SHALL BE BARRED FROM FURTHER AUDIENCE BEFORE THE COMMISSION BY THE PRESIDING OFFICER, UNLESS PERMISSION TO CONTINUE OR AGAIN ADDRESS THE COMMISSION BE GRANTED BY THE MAJORITY VOTE OF THE COMMISSION MEMBERS PRESENT. NO CLAPPING, APPLAUDING, HECKLING OR VERBAL OUTBURSTS IN SUPPORT OR OPPOSITION TO A SPEAKER OR HIS OR HER REMARKS SHALL BE PERMITTED. NO SIGNS OR PLACARDS SHALL BE ALLOWED IN THE COMMISSION CHAMBERS. PERSONS EXITING THE COMMISSION CHAMBER SHALL DO SO QUIETLY. THIS PRINTED AGENDA IS DISTRIBUTED AT LEAST FIVE DAYS BEFORE THE MEETING, AND THE MATERIAL IN CONNECTION WITH EACH ITEM APPEARING ON THE AGENDA IS AVAILABLE FOR INSPECTION DURING BUSINESS HOURS AT THE OFFICE OF THE CITY CLERK IN CITY HALL, AT AGENDA OFFICE/MIAMI RIVERSIDE CENTER, OR ON-LINE AT WWW.MIAMIGOV.COM. ANY PERSON WHO SEEKS TO ADDRESS THE CITY COMMISSION ON ANY PROPOSITION BEFORE THE CITY COMMISSION IS INVITED TO DO SO AND SHALL AS SOON AS POSSIBLE INFORM THE CITY CLERK OF HIS/HER DESIRE TO SPEAK, GIVING THE CITY CLERK HIS/HER NAME. AT THE TIME THE ITEM IS HEARD, THAT PERSON SHOULD APPROACH THE MICROPHONE AND WAIT TO BE RECOGNIZED BY THE PRESIDING OFFICER. City ofMiami Page 2 Printed on 5/25/2017 City Commission Meeting Agenda May 30, 2017 Formal action may be taken on any item discussed or added to this Agenda. Any person, or persons, wishing to appeal any decision made by the City Commission with respect to any matter considered at this meeting or hearing, will require a verbatim record of the proceeding upon which the appeal is based. Any person with a disability requiring auxiliary aids and services for meetings may call the City Clerk's Office, 305-250-5361, with requests at least two business days before the meeting date. * * * * * * * * * * * * * * * * * * * * * The City Commission has established a policy that the lunch recess will begin at the conclusion of deliberations of the agenda item being considered at Noon; further, that Commission meetings shall adjourn (a) at the conclusion of deliberation of the agenda item being considered at 10:00 p.m., unless the time is extended by unanimous agreement of the members of the City Commission then present or (b) at the conclusion of the regularly scheduled agenda, whichever occurs first. This rule does not apply when the City Commission is engaged in its annual budget hearings (Ordinance 12586). City ofMiami Page 3 Printed on 5/25/2017 City Commission Meeting Agenda May 30, 2017 10:00 AM INVOCATION AND PLEDGE RESOLUTIONS SPA RESOLUTION 2334 A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), DIRECTING THE CITY MANAGER TO ISSUE A NOTICE OF DEFAULT TO FLAGSTONE ISLAND GARDENS, LLC ("FLAGSTONE") OF THE AMENDED AND RESTATED AGREEMENT TO ENTER INTO GROUND LEASE ("AMENDED AND RESTATED AGREEMENT TO ENTER") AND THE AMENDED AND RESTATED GROUND LEASE(S) ("AMENDED AND RESTATED GROUND LEASES") AS APPLICABLE, DUE TO FAILURE TO COMMENCE CONSTRUCTION AS REQUIRED BY THESE AGREEMENTS; AND FURTHER DIRECTING THAT THE CITY ATTORNEY AND INDEPENDENT AUDITOR GENERAL CONDUCT AN ANALYSIS OF THESE AND ANY OTHER RELATED AGREEMENTS WITH FLAGSTONE TO DETERMINE IF THERE ARE OTHER BREACHES. 2334 Exhibit A 2334 Exhibit B History 05/25/17 City Commission DEFERRED Next: 05/30/17 RESULT: DEFERRED [UNANIMOUS] Next: 5/30/2017 10:00 AM MOVER: Wifredo (Willy) Gort, Commissioner, District One SECONDER: Keon Hardemon, Chair AYES: Keon Hardemon, Wifredo (Willy) Gort, Frank Carollo, Francis Suarez ABSENT: Ken Russell END OF SPECIAL MEETING City ofMiami Page 4 Printed on 5/25/2017 AGENDA ITEM COVER PAGE File ID: #2334 Resolution Sponsored by: Vice Chair Ken Russell A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), DIRECTING THE CITY MANAGER TO ISSUE A NOTICE OF DEFAULT TO FLAGSTONE ISLAND GARDENS, LLC ("FLAGSTONE") OF THE AMENDED AND RESTATED AGREEMENT TO ENTER INTO GROUND LEASE ("AMENDED AND RESTATED AGREEMENT TO ENTER") AND THE AMENDED AND RESTATED GROUND LEASE(S) ("AMENDED AND RESTATED GROUND LEASES") AS APPLICABLE, DUE TO FAILURE TO COMMENCE CONSTRUCTION AS REQUIRED BY THESE AGREEMENTS; AND FURTHER DIRECTING THAT THE CITY ATTORNEY AND INDEPENDENT AUDITOR GENERAL CONDUCT AN ANALYSIS OF THESE AND ANY OTHER RELATED AGREEMENTS WITH FLAGSTONE TO DETERMINE IF THERE ARE OTHER BREACHES. Of'�� �,o1 f City of Miami City Hall * INC t I ttti(t * •� 1t tt Legislation 3500 Pan American Drive Miami, FL 33133 � �� p H � Resolution www.miamigov.com File Number: 2334 Final Action Date: A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), DIRECTING THE CITY MANAGER TO ISSUE A NOTICE OF DEFAULT TO FLAGSTONE ISLAND GARDENS, LLC ("FLAGSTONE") OF THE AMENDED AND RESTATED AGREEMENT TO ENTER INTO GROUND LEASE ("AMENDED AND RESTATED AGREEMENT TO ENTER") AND THE AMENDED AND RESTATED GROUND LEASE(S) ("AMENDED AND RESTATED GROUND LEASES") AS APPLICABLE, DUE TO FAILURE TO COMMENCE CONSTRUCTION AS REQUIRED BY THESE AGREEMENTS; AND FURTHER DIRECTING THAT THE CITY ATTORNEY AND INDEPENDENT AUDITOR GENERAL CONDUCT AN ANALYSIS OF THESE AND ANY OTHER RELATED AGREEMENTS WITH FLAGSTONE TO DETERMINE IF THERE ARE OTHER BREACHES. WHEREAS, the City of Miami ("City") owns certain real property at approximately 1050 MacArthur Causeway, Miami, Florida ("Property"); and WHEREAS, pursuant to applicable competitive solicitation processes, Flagstone Island Gardens, LLC ("Flagstone") was selected as the most qualified, responsive, and responsible bidder to develop and lease a mega -yacht marina and ancillary facilities such as retail, parking, hotels, and other related facilities on the Property ("Project"); and WHEREAS, the Miami City Commission, pursuant to Resolution No. 01-972, adopted on September 17, 2001, and Resolution No. 01-1028, adopted September 25, 2001, polled the electors of the City regarding leasing the Property to Flagstone for the Project and the voters approved the Project by an affirmative vote; and WHEREAS, pursuant to Resolution No. 02-1304, adopted on December 12, 2002, the City and Flagstone entered into an Agreement to Enter into a Ground Lease ("Agreement to Enter") and a form of proposed Ground Lease ("Ground Lease") dated January 1, 2003, with exhibits and attachments; and WHEREAS, subsequently, the City and Flagstone entered into certain Amendments to the above referenced Agreements; and WHEREAS, the parties thereafter, by Resolution No. 10-0402, adopted on September 23, 2010, entered into an Amended and Restated Agreement to Enter into Ground Lease ("Amended and Restated Agreement to Enter") and an Amended and Restated Ground Lease(s) ("Amended and Restated Ground Leases") dated February 1, 2010; and WHEREAS, the Project is a phased project consisting of Phase 1 - the Marina; Phase 2 — Retail/Parking; Phase 3 - Hotel 1; and Phase 4 - Hotel 4; and WHEREAS, Flagstone and the City entered into the Amended and Restated Ground Lease for the Retail/Parking Phase in August, 2016; and WHEREAS, the deadline to commence construction of the Retail/Parking Phase [as extended by Force Majeure and State of Florida Executive Order 15-173, which tolled all Development Permits for sixty (60) days and six (6) months], was May 1, 2017; and WHEREAS, Composite Attachment 3 approved by Resolution No. 10-0402, adopted September 23, 2010, and incorporated by reference in the Amended and Restated Ground Lease for the Retail/Parking Phase, defines "Commence Construction "or "Starts Construction" to mean that "all material plans and permits are approved and the act of physical construction has begun," as depicted in Exhibit "A," an excerpt from Composite Attachment 3, attached and incorporated; and WHEREAS, the District 2 Commissioner requested that at the next City Commission Meeting of May 25, 2017, or a Special City Commission Meeting, if one could be convened, there be a discussion and possible action item on whether Flagstone may be sent a Notice of Default by the City Manager for failing to timely commence construction of the Retail/Parking Phase of the Project, as described in Exhibit "B," attached and incorporated; 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 directed to issue a Notice of Default to Flagstone as to Flagstone's failure to perform any covenants, conditions, or agreements of the Amended and Restated Ground Lease, including, without limitation, the Amended and Restated Ground Lease for Retail/Parking and Composite Attachment 3, as applicable. Section 3. The City Manager is further directed to issue a Notice of Default stating, with particularity, the respects in which the City, as the Lessor, contends that Flagstone, as the Lessee, has failed to perform. Section 4. The Office of the City Attorney and the Office of the Independent Auditor General, with the assistance of the City Administration, are directed to review the Amended and Restated Ground Lease, the Amended and Restated Ground Lease for Retail/ Parking, and any other pending Agreements with Flagstone related thereto, to determine if there are any other current breaches. Section 5. This Resolution shall become effective immediately upon its adoption and signature of the Mayor.' APPROVED AS TO FORM AND CORRECTNESS r iria i " nd- e�z� Attor iey 5/16/2017 ' 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. UI to the second Option period shall be due upon commencement of the second Option period until the second Hotel Component reaches its Completion Date. (d) Upon entering into the Ground Lease for any Hotel Component(s) and prior to Starting Construction for any such Hotel Component(s), Flagstone shall provide a Construction Bond to the City for the full amount of the construction cost of any such Hotel Component(s). ADDITIONAL AGREEMENTS CONCERNING FLAGSTONE FORFEITURE / CITY TERMINATION RIGHTS. (a) If the Marina Component does not Start Construction by 9/01/2013 or both the Parking/Retail Components do not Start Construction by 9/01/2016, then Flagstone's rights to build any Components expires and ceases, the Agreement to Enter is terminated, City retains all Prepaid Construction/Base Rent (as consideration for the extension of time until 9/1/2013 for the Marina Component and as consideration for the extension of time until 9/1/2016 for both the Parking/Retail Components) and Flagstone must turn over to the City immediately the applicable Ground Lease(s), Flagstone also agrees to waive its defenses as to failure to begin construction against the City, immediately vacate and turn over to the City for the City's possession all of Flagstone's rights and interests in the Property and the easement areas, remove from such easement areas and from the Property all of its property of whatever kind as requested in writing by the City Manager, and immediately (i) return or sign over, as applicable, to the City all of Flagstone's rights, directly or indirectly, in the permits, plans, specifications, and all related governmental approvals, documents, instruments, and agreements as necessary related to the Property, and (ii) deliver to the City all of such permits, plans, specifications, and all related governmental approvals, documents, instruments, and agreements which are in Flagstone's possession or in Flagstone's control. (b) If any Hotel Component does not Start Construction according to the applicable deadline under the construction schedule and the Option schedule(s) (as applicable), then Flagstone's rights to build the applicable Hotel Component expires (but Flagstone's obligations under the payment schedule for the Marina Component, the Parking/Retail Component, and any Hotel Component that is/are complying continues to the end of the applicable Ground Lease(s)). Any time Flagstone loses the right to construct a Hotel(s) Component, then Flagstone must turn over to the City immediately the applicable Ground Lease(s), Flagstone also agrees to waive its defenses as to failure to begin construction against the City, immediately vacate and turn over to the City for the City's possession .all of Flagstone's rights and interests in the applicable Hotel Component, any Hotel Ground Lease, and the related easement areas, remove from such easement areas and from the Property all of its property of whatever kind as requested in writing by the City Manager, and immediately (i) return or sign over, as applicable, to the 163 a City all of Flagstone's rights, directly or indirectly, in the permits, plans, specifications, and all related governmental approvals, documents, instruments, and agreements as necessary related to the applicable Hotel Component, and (ii) deliver to the City all of such permits, plans, specifications, and all related governmental approvals, documents, instruments, and agreements which are in Flagstone's possession or in Flagstone's control. (c) Subject to Section VII(a), Flagstone may separately ground lease and separately construct the Marina Component prior to 9/1/2013 if the conditions precedent for the Marina Component are met (d) If construction is continuing during the Option period(s), then Flagstone shall pay both; Construction Rent or Base Rent in accordance with the General Rent Schedule in Section II above, and the applicable Option payments related to its choice to construct either one or two Hotel Components. VII. CROSS DEFAULTS; SEPARATE DEFAULTS. (a) During the period prior to the earlier of 96 months from 9/01/2010 (being 8/31/2018) or the date upon which the first Hotel is Open for Business, Ground Leases for the separate Major Project Components shall be cross -defaulted for any Base Rent payment defaults, Prepaid Construction/Base Rent payment defaults, and any Construction Rent payment defaults. (b) After the earlier of 96 months from 9/01/2010 (being 8/31/2018) or the date upon which the first Hotel is Open for Business, (i) the Base Rent, Percentage Rent, and all other payments to the City each year thereafter shall be apportioned to each separate Major Project Component Ground Lease for direct payments to the City by each separate Ground Lease lessee in an amount reflecting each separate Major Project Component's respective percentage share of the total Project Development Costs to that point in time, and (ii) the Ground Leases for the separate Major Project Components shall not be cross -defaulted for any defaults, including but not limited to any defaults in payments of Base Rent, Prepaid Construction Rent/Base Rent, Construction Rent, Percentage Rent, or any other Rent, with each separate lessee being solely responsible for any payment default(s) to the City. (a) Notwithstanding anything to the contrary in this Exhibit A, if the Retail/Parking Components do not Commence Construction by the 72nd month from 9/01/2010 (being 8/31/2016), then (i) there will be no crediting of Prepaid Construction/Base Rent, the City shall keep all Prepaid Construction/Base Rent received, (ii) the City can terminate the Agreement to Enter, all Ground Lease(s), and (iii) the City can take back the Marina Component, the Retail/Parking Components, any Hotel Components and the balance of the Project and the Property., VIII. STATE WAIVER. 164 Medina, Anna Subject: FW: Flagstone statement From: Ken Russell <krussell@miamigov.com> Date: Friday, May 12, 2017 at 1:55 PM To: "Jones, Joyce" <JJones@miamigov.com>, "Hannon, Todd" <thannon@miamigov.com> Subject: FW: Flagstone statement I placed this discussion item on the agenda today because I'm frustrated. It has been more than 15 years since the City of Miami and our voters gave the right to develop our public land on Watson Island to Flagstone. Ever since, we've entertained a litany of excuses as to why very little of the project voters approved has been built. At this moment we have before us what I think is a pretty clear issue -- Flagstone had a deadline to have all its material permits approved and actually begin construction by May 1 of this year. I understand they moved some dirt around a few days before to try to convince us that construction had begun. Not the first time they've done that, by the way. But their phased permit, which allows them to begin building before the master permit is finally approved, actually expired back in March and was not reinstated until May 4. Three days late? No - it's 15 years and three days late. Fifteen years we've been waiting for Flagstone to deliver what it promised. Here's what the Miami Herald wrote in December of 2002: "The project, approved in concept by city voters last year, would convert 10 acres of land into a bustling neighborhood - with two five-star hotels, a fish market and a yacht marina. It's expected to be complete in about three years." Back then, the City was looking to attract signature projects that would pump up our local economy. Midtown didn't yet exist. Wynwood as we know it today didn't exist. Downtown and Brickell were a shadow of their current form. We didn't have the arsht, the Frost, the Perez Museums. Most of all, we didn't have the congestion and infrastructure needs that we do now. And yet here we are, 15 plus years later, still talking about Flagstone. At this point, I have to ask, is Flagstone even relevant anymore to the vision of what our public land on Watson Island could and should be? Is this project - should it ever be built and I'm pretty skeptical about that -- what Miami needs and deserves? The Voters spoke back then, but if they spoke today, what would they say? If we were to plan that space right now, I would advocate for an RFP that has the developer implementing a multimodal transit hub that connects and finances the Baylink and water taxis. It could be the point of public transit to all of the best amenities on the island. It could be a beautiful green space that would give the most amazing views of our downtown skyline. But the voters don't have a say. Unless this developer is in default, and I believe that they are. In Paragraph Vl.a ofr the Amended and restated Agreement to enter into the Ground lease from 2010, it states, "If ... the Parking/Retail Components do not Start Construction by 9/01/2016 (extended by Governor's executive order to May 1 of this year), then Flagstone's rights to build any Components expires and ceases, the Agreement to Enter is terminated. City retains all Prepaid Construction/Base Rent". The Phrase "Begins Construction" is defined in Exhibit A of Composite Attachment 3 of the same agreement. The phrase "Start Construction shall mean that all material plans and permits are approved and issued and the actual act of physical construction has begun. CO r t X LU v M M N c W E t U M r r Q Furthermore, in paragraph VII. A of the same agreement, it states that "If the Retail Parking Components do not Commence Consruction by the 72nd month from 9/01/2010 (being 8/31/2016 and now May 1, 2017) then there will be no crediting of Prepaid Construction/base Rent, The City shall keep all Prepaid Construction Base Rent Received, the City can terminate the Agreement to Enter, all Ground Leases, and the City can take back the Marina Component... and the balance of the project and the property. The phased permit expired and was not renewed before the date. The master building permit has not yet been obtained. The City has lost millions in undervalued rent. The only silver lining is that we can now look at the land in the context of our needs today. I hope for your support in giving the voters this long overdue chance. I move that we direct the administration to issue a notice of default, and that our city attorney and auditor general conduct an analysis of the various agreements to see if there are other breaches as well.