HomeMy WebLinkAboutSubmittal-Marin Kim-City of Miami Memo RE Termination of MESASubmitted into the public
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CITY OF MIAMI
OFFICE OF THE CITY ATTORNEY
MEMORANDUM
TO: Emilio T. Gonzalez, PhD.
City Manager !�
FROM: George K. Wyson , III, Dr� Chief for General Government
DATE: March 21, 2018
RE: Termination of the Miami Sports and Exhibition Authority
Matter ID No.: 18-237
You have asked substantially the following questions:
Whether the Miami Sports and Exhibition Authority ("MSEA') may be abolished or
sunsetted.
lWhether the current functions of MSEA may be incorporated into the Office of Film
and Entertainment, another City of Miami ("City") department, or the Bayfront Park
Management Trust,
Question 1, (tether A43EA may be abolished or sunsetted
The short answer to your first question is yes, MSEA may be abolished.
MSEA was established as an independent and autonomous agency and instrumentality of the
City pursuant to Ordinance No. 9662, adopted July 28,1983, in order to promote sports, conventions,
and exhibitions and to strive to generate community support to achieve this purpose. The adoption
of the ordinance was in accordance with former Florida Statute Section 212.057 (1983) (now
repealed and superseded by Florida Statute Section 212,0305). Section 212.0305, Florida Statutes,
authorizes counties to impose a convention development tax ("CDT") on transient rentals. The
statute further provides that in order fora municipality to obtain any such CDTs, the governing body
of such municipalities shall designate or appoint an authority that shall have the sole power to
approve the concept, location, program, and design of the facilities or improvements to be built in
accordance with the statute and to administer and disburse such proceeds and any other related
source of revenue.
Miami -Dade County, pursuant to Section 212.0305(4)(b), Florida Statutes, Section 29-60 of
the Code of Miami -Dade County, Florida, and Ordinance No. 83-91 enacted by the Board of County
Commissioners of Miami -Dade County (";Board") on June 5, 1984 (collectively, "Authorization"),
imposed a levy on the exercise within its boundaries of the taxable privilege of leasing or letting
transient rental accommodations at the rate of three percent (3%) of the total consideration charged
for such accommodations (CDT) and has the discretion to determine the use of the CDT Receipts.
The Authorization provides that one-third of the CDT ("One Third CDT Share") receipts are
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required to be used for eligible projects such as stadiums, exhibition halts, arenas, coliseums, etc. in
the most populous municipality in the County, which is the City of Miami.
In 1992, the County agreed to distribute the One Third CDT Share to MSEA as collateral for
bonds issued by MSEA to fund the cost of the Miami Arena. The One Third CDT Share was also
used by MSEA to pay for the operations of the Miami Arena. In 1996, the County agreed to allow
the City to use certain accumulated CDT -related funds held by MSEA to offset the operating cost of
City -operated CDT -eligible projects. The 2004 Interlocal essentially eliminated the payment to
MSEA of the One Third CDT Share once the Miami Arena was sold and the MSEA bonds defeased,
which happened in December 2004. It also provided that the City would receive a portion of the
CDT Receipts for the funding of the Ballpark and renovations to the Orange Bowl, In 2009, the
City and County terminated the 2004 Interlocal Agreement and entered into a new agreement. The
new agreement provides that the County will make monthly payments solely from CDT Receipts to
the City, not MSEA, until dune 30, 2039.
Consequently, MSEA does not presently receive or administer any CDTs collected pursuant
to Section 212.0305, Florida Statutes. MSEA's revenues are garnered from rent collected from the
lease of property to the Miami Children's Museum, the Seaplane base, and the heliport on Watson
Island in accordance with an interlocal agreement between the City and MSEA. Thus, there is no
statutory impediment to abolishing MSEA.
If the City decides to abolish MSEA, it must do so through the adoption of an ordinance.
Since MSEA was created by ordinance, it may only be abolished by ordinance. In City ofMiand r.
Rodriguez-Quesada, 388 So. 2d 258 (Fla. 3d DCA 1980), it was determined that the City
Commission was authorized to create the Little Havana Community Development Board and was
privileged to abolish it. The case was based on the general rule in Florida that the power to create
an office generally includes the power to modify or abolish it even though the office is occupied by
a duly elected incumbent. City ofJacksonville v. Smoot, 83 Fla. 575, 92 So. 617 (1922); 9 FiaJur.2d
Civil. Servants s 20; 63 Am.dur.2d Public Officers and Employees s 33.
Question 2, Whether the current functions of MSEA may be inem por'ated into lite Office of
Film and Enterfaintnem, another City department, or Bayfront Park Management Trust.
The current functions of MSEA may be incorporated into the Office of Filen and
Entertainment or any other City department at the discretion of the City Manager. According to
Section 2-1012 of the City Code, the purpose of MSEA is to promote sports, conventions, and
exhibitions to the greatest extent feasible and to generate and further community support to
achieve this purpose. MSEA shall also endeavor to attract professional sports franchises to
utilize facilities in the City.
MSEA, according to its February 2014 Annual Report to the City Manager, describes its
function as follows:
The Miami Sports and Exhibition Authority (MSEA) was established in 1983, pursuant to
Florida Statute 2I2.057, as an independent and autonomous agency and instrumentality of
the City of Miami. MSEA was created to promote sports, conventions and exhibitions and
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to strive to generate community support to achieve this purpose. It was further given the
authority to exercise any power usually possessed by private corporations performing similar
functions that are not in conflict with the Florida constitution or law. Pursuant to that
mandate, MSEA continues to serve the community as the landlord of the Miami Children's
Museum and the Chalk's seaplane operation on Watson Island. It also has a primary role in
the Watson Island heliport.
Incorporating the functions of MSEA into the Bayfront Park Management Trust ("Trus!")
appears to be beyond the powers and scope of the Trust. Section 38-102 of the City Code provides
that the purpose of the Trust is to "direct, operate, manage and maintain all aspects of the city -owned
property known as Bayfront Park _(hereinafter referred to as "park"'), for the purposes of ensuring
maximum community utilization and enjoyment. The trust shall endeavor to attract organized
activities and functions to the park consistent with this purpose." Section 38-104 of the City Code
provides that the "trust shall have the power to do all things necessary to direct, manage and maintain
Bayfront Park, subject at all times to city commission approval and any existing contractual
obligations," MSEA's purpose, as stated above is to promote sports, conventions, and exhibitions
to the greatest extent feasible and to generate and further community support to achieve this purpose.
Such promotion is intended to affect the entire City and not just Bayfront Park.
Ultimately, the decision of which City department will inherit the functions of MSEA ties
with the City Manager. For the City, through the designated department, to assume landlord
responsibilities, the Revised and Amended Interlocal Agreement by and Between the City of Miami
and the Miami Sports and Exhibition Authority (Interlocal) would have to be terminated and new
agreements entered into between the City and the subtenants. Such a transition would be relatively
smooth considering that the City is already the owner of the land and serves as the prime landlord
for the leasehold interests.
The procedure for the City to take over responsibility for the leases is provided in Article 22
of the Interlocal, entitled "Attornment by Subtenant and Non Disturbance by City," which provides:
The cancellation or termination of the Agreement by the Parties hereto, shall not interfere
with any rights of subtenants under this Agreement, provided that: (i) such sublease
agreements have been approved by the City; (ii) the subtenants are not in default under their
respective agreements; (iii) and such subtenants enter into agreements with the City whereby
such subtenants attorn to the City, assume all obligations and liabilities in connection with
the portion of the Property under their respective sublease agreement, including but not
limited to: maintenance, repairs, impositions. insurance and liability for damage, destruction
and environmental contamination.
This provision means that the subtenants, the Miami Children's Museum, the Seaplane Base,
and the heliport, are required to enter into an agreement with the City whereby they agree to be the
tenants of the City and ;Fulfil all of their obligations under the previous interlocal agreement. The
attornment process does not provide either party an opportunity to renegotiate the terms of the
agreement. The attornment process simply provides that the tenant agrees to "attorn" to the new
landlord, the City, and the City agrees not to disturb the tenants' leases.
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The Sublease Agreement Between MSEA and Linden Services Corporation ("Linden
Sublease") also provides an attomment clause. Section 25.15 of the Linden Sublease provides that
in the event of the termination of the Interlocal Agreement, Linden shall attom to the City. Section
25.15 of the Linden Sublease further provides that the possession of the property by Linden shall
not be disturbed so long as Linden is not in default of the Sublease. The Amended and Restated Air
Terminal Facility Sublease ("Chalks Sublease") does not include an attornment provision but does
provide that the Chalks Sublease is subject and subordinate to the Interlocal Agreement.
In summary, there is no statutory impediment to abolishing MSEA. Any such abolition must
be achieved through the adoption of an ordinance. The City Manager may designate any appropriate
City department to take over the functions of MSEA which are presently in the nature of serving as
landlord to several tenants on Watson Island. The Interlocal Agreement between the City and MSEA
will have to be terminated and a new agreement between the City and the Watson Island tenants
would have to be executed.
ProLaw No. 909366