Loading...
HomeMy WebLinkAboutCC 2017-05-30 Minutes (Revised) City of Miami City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com Meeting Minutes May 30, 2017 10:00 AM Special Meeting City Hall City Commission Keon Hardemon, Chair Ken Russell, Vice Chair Wifredo (Willy) Gort, Commissioner, District One Frank Carollo, Commissioner, District Three Francis Suarez, Commissioner, District Four Tomás Regalado, Mayor Daniel J. Alfonso, City Manager Victoria Méndez, City Attorney Todd B. Hannon, City Clerk City Commission Meeting Minutes May 30, 2017 10:00 AM INVOCATION AND PLEDGE OF ALLEGIANCE Present: Chair Hardemon, Vice Chair Russell, Commissioner Gort, Commissioner Carollo and Commissioner Suarez On the 30th day of May, 2017, the City Commission of the City of Miami, Florida, met at its regular meeting place in City Hall, 3500 Pan American Drive, Miami, Florida, in special session. The Commission Meeting was called to order by Chair Hardemon at 10:18 a.m., and adjourned at 2:09 p.m. ALSO PRESENT: Daniel J. Alfonso, City Manager Victoria Méndez, City Attorney Todd B. Hannon, City Clerk Chair Hardemon: Welcome to the May 30, 2017 special meeting of the City of Miami City Commission in these historic chambers. The members of the City Commission are Wifredo Gort, Frank Carollo, Francis Suarez; Ken Russell, the Vice Chair; and me, Keon Hardemon, the Chairman. Also on the dais are Daniel J. Alfonso, our City Manager; Victoria Méndez, the City Attorney; and Todd Hannon, our City Clerk. The meeting will be opened with a prayer by Commissioner Gort; and the pledge of allegiance, led by Commissioner Carollo. All rise, please. Invocation and pledge of allegiance delivered. ORDER OF THE DAY Chair Hardemon: We will now begin the special meeting. The City Attorney will state the procedures to be followed during the special meeting. Victoria Méndez (City Attorney): Chairman, I do not have my procedures; if you'll give me one second -- oh, yes, I do. Thank you. We will now begin the special meeting. Any person who is a lobbyist, including all paid persons or firms retained by a principal to advocate for a particular decision by the City Commission, must register with the City Clerk and comply with the related City requirements for lobbyists before appearing before the City Commission. A person may not lobby a City official, board member, or staff member until registering. A copy of the Code section about lobbyists is available in the City Clerk's Office; and online, at wwwmunicode.com \[sic\]. Any person making a presentation, formal request or petition to the City Commission concerning real property must make the appropriate disclosures required by the City Code in writing. A copy of this Code section is available in the City Clerk's Office; and online, at wwwmunicode.com \[sic\]. The material for the item on the agenda is available during business hours at the City Clerk's Office; and online, 24 hours a day, at wwwmiamigov.com \[sic\]. Any person may be heard by the City Commission through the Chair for not more than two minutes on any proposition before the City Commission, unless modified by the Chair. If the proposition is being continued or rescheduled, the opportunity to discuss will be at such later date. The Chairman will advise the public when the public may have the opportunity to address the City Commission during the public comment period. When addressing the City Commission, the member of the public may first state his or her name, his or her address, and what is being spoken about. Anyone wishing to appeal -- No cell phones or other noise-making devices are permitted in chambers; please silence those devices no. No clapping, applauding, heckling, or verbal outbursts in support or opposition to a speaker or his or her remarks shall City of Miami Page 1 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 be permitted. Any person making offensive remarks or who becomes unruly in Commission chambers will be barred from further attending Commission meetings, and may be subject to arrest. No signs or placards shall be allowed in Commission chambers. Any person with a disability requiring assistance, auxiliary aids and services for this meeting may notify the City Clerk. The lunch recess will begin at the conclusion of the agenda item being considered at noon. Please note, the Commissioners have generally been briefed on items on the agenda today. Thank you. Chair Hardemon: Thank you very much. RESOLUTION SP.1 RESOLUTION 2334 A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), DIRECTING THE CITY MANAGER TO ISSUE A Commissioners NOTICE OF DEFAULT TO FLAGSTONE ISLAND GARDENS, LLC and Mayor AMENDED AND RESTATED AGREEMENT TO ENTER INTO GROUND RESTATED AND THE AMENDED AND RESTATED ENDED AND RESTATED GROUND LE, 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. ENACTMENT NUMBER: R-17-0263 MOTION TO: Adopt with Modification(s) RESULT: ADOPTED WITH MODIFICATION(S) MOVER: Ken Russell, Vice Chair SECONDER: Frank Carollo, Commissioner AYES: Hardemon, Russell, Gort, Carollo, Suarez Chair Hardemon: What I'll do at this point is I'll open the floor for public comment, understanding that we have one agenda item that is on the agenda today. That resolution is a resolution of the Miami City Commission, with attachments, directing the City Manager to issue a notice of default to Flagstone Island Gardens, LLC (Limited Liability Company), of the amended and restated Agreement to Enter into Ground Lease, and the amended and restated agreement -- I'm sorry -- 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 any other breaches. So if you are a member of the public and you'd like to make a comment on the agenda item that is here today, you are encouraged to step before one of the two lecterns. State your name and your address for the record, if you'd like, and you have two minutes to address this body. City of Miami Page 2 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Sam Dubbin: Mr. Chairman, I'm Sam Dubbin. I represent the Coalition Against Causeway Chaos, and it was my understanding that I would have the opportunity to speak after Flagstone since it's my clients who have been actively engaged, as members of the public, following the, you know, the City's handling of this document. A, you know, four-page letter was filed Friday afternoon that, you know, my clients had never had a chance to even see. I imagine some of those issues are going to be raised here, and in fairness, we request at least as much time as Mr. May to address all of the points he's going to make on behalf of Flagstone. Chair Hardemon: Mr. May. Brian May: Mr. Chairman, Brian May again. I respectfully would request that if you're going to afford them equal time that we have an opportunity to rebut whatever they put on the record. The reason for that, Mr. Chairman, is we're actually a party to the agreement between Flagstone and the City of Miami. What's at stake here is not something small; it's something very large, very big. My client would like every opportunity to be able to put on the record his case, and to rebut any allegations, any accusations, whether they are frivolous or whether they are relevant. Chair Hardemon: Sir, are you all a party to this, between the City and Flagstone? Mr. Dubbin: Well, my clients are residents of the various parts of the City, who have brought to the Commission's attention a number of legal flaws in this -- in the -- in Flagstone's applications, okay; several of which, the -- Flagstone -- Chair Hardemon: Before you move into -- Mr. Dubbin: Sure. Chair Hardemon: -- any allegations, because that's not what this time -- Mr. Dubbin: Right. Chair Hardemon: -- right now is for -- between you and I, what we were speaking about -- Mr. Dubbin: Sure. Chair Hardemon: -- the -- Have you filed suit against Flagstone? Mr. Dubbin: My clients -- members of the Coalition did, in fact, file a lawsuit that was dismissed for lack of standing. Subsequent to that, the City Commission authorized a Charter amendment that with -- 84 percent of the public voted that citizens should have standing to challenge just these kinds of violations, so I think the public outcry for -- Chair Hardemon: The -- before you move any further -- but where you would file those lawsuits is not before the City Commission; am I correct? You would file those lawsuits, not before this City Commission, but before the court of law. Mr. Dubbin: Well, the basis of the lawsuit was that in May 8, 2014, when my clients informed this Commission that it was about to approve a lease of public land for less than fair market value, with a $5 million annual subsidy, and the -- Mr. May: Mr. Chairman, those issues are irrelevant -- Mr. Dubbin: No, it's not -- let me finish, Brian. City of Miami Page 3 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Mr. May: -- to what's on the resolution today. Mr. Dubbin: And we were informed by the City Attorney's Office that you could not even consider the fact that you're about to violate the Charter. That is in court, because the -- my clients did bring to the Ethics Commission the fact that the City Attorney -- Chair Hardemon: So what are you doing today? Are you lobbying today, or are you here just representing -- I mean, I'm trying to understand exactly your position -- Mr. Dubbin: Well, I'm -- Chair Hardemon: -- because the public comment time is an opportunity for residents and individuals who have something to say about this to speak about it. The contract is definitely between the City of Miami and Flagstone that we'll be discussing. We'll allow you to have a bit more time to speak, if you wish, because you represent some of the people that live within the City, and they felt that it was better for you to represent their interest than for them to speak on behalf of themselves. But I -- what I won't allow is for you to get into a tit for tat or -- because this is not a matter that is between you and Flagstone; it is a matter between the City of Miami and Flagstone. So we appreciate the guidance that you may try to give us, like any other of our smart constituents would - - and I'm looking at some of them right now before me -- who always give great argument, and I suggest that you're probably going to give some great argument, as well. However, what I'm going to allow you to do is have an opportunity to speak for more than two minutes about whatever you have to put on the record, and then I want -- but I -- but before you do, I want to allow the rest of the public in general to have an opportunity to speak. Mr. Dubbin: Okay. And one last thing: My client is in court, because the Assistant City Attorney -- Victoria Méndez (City Attorney): I object to him starting to malign anybody. We're here for a contract, and that is what we're here for today. Mr. Dubbin: Understand. But arising out of the -- Chair Hardemon: Counselor, counselor, counselor -- Mr. Dubbin: -- approval of the contract is a public -- is a -- Chair Hardemon: -- counselor, so let's do this: Let's allow the public to speak, and then I'll give you an opportunity to lay your record that you would like to weigh -- to lay down, and then we'll get into the matters to allow the Commissioner of the district -- from the Second District -- to put his information on the record so that he can make what motion he deems is necessary. Mr. Dubbin: Thank you. Chair Hardemon: Thank you. Chair Hardemon: Sir, you can speak. Gerald Burton: First one. My name is Gerald Burton. I'm a resident of Coral Gables. I have business interests nearby, and I have property interests in Brickell. Now I'm here in behalf of Flagstone, to support their efforts, because I'm in the marine business and have been so for more than 30 years, and I've watched the struggle that's been involved in actually building this marina and really bringing to Miami the superyacht world. If you look back six years ago, we had no superyachts in Miami. Over the course -- over City of Miami Page 4 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 the last particularly four years, we now have a lot of superyachts in Miami, especially during the superyacht show in February. We've now created an environment through Flagstone to become known worldwide as the Monaco of North America, and have brought all these yachts here. In February, not only was the Flagstone Marina filled with more than 27 yachts, ranging from 150 feet to over 200 feet, but the Epic was already filled; the Miami Marina was completely filled; the port over there was filled with superyachts. This gives Miami a great glow in the world stage and makes us something more than just a South Beach City, but really an international destination. My belief is that if there is going to be a struggle over this, the captains will all find out about this; it will tarnish the reputation of Miami; the word will spread back to Europe, where all of these yachts are; and people, especially these kind of people, will not bring their vessels here, because they don't want to be involved in an uncertain type of operation. My company is located nearby. A number of my company employees are also residents, you know, of this area, and I speak for them, as well. We didn't want to shut down our company to come here and talk, but I thank you for listening to me, and I think that you will find, if you study it, what I've said is really correct. Thank you. Chair Hardemon: Thank you very much, sir. You're recognized, sir. Mark Samuelian: Thank you. Good morning, Chairman Hardemon and Commissioners. My name is Mark Samuelian. I'm speaking on my own behalf. I live at 10 Venetian Way, Miami Beach, and am directly affected by the impact of the Flagstone project on traffic on McArthur and Venetian Causeways. But I'm also an engineer; a retired partner from the consultant firm, Accenture; and president of Miami Beach United, a citywide umbrella activist groups, whose members are neighborhood associations and residents. And I'm presently a candidate for Commissioner in Miami Beach. I spend a good part of nearly every day talking to Beach residents, businesses, employees, and visitors. And one thing is absolutely clear: The traffic between Miami and Miami Beach is at a critical stage, if not already past it. I'm here to ask the Commission to recognize an unfortunate 16-year history where there are many issues. I want to briefly touch on traffic. The two recent traffic studies conducted by Miami Beach raise serious concerns. This is especially true with the combined effects of the 2004 approved development and 2016 requested increase. This for-profit project, on public land, designated for public use, puts at risk the economies of Miami Beach, but also the County. We are already at the tipping point where visitors would rather seek other destinations than fight traffic; a situation greatly magnified by special events. I've learned that the Florida Department of Transportation has requested specific terms for Flagstone's application for further expansion of the project. If the current pro -- plan is harmful, why expand it? I ask that we not continue this, but that you permit the project to die, and start immediately seeking comments and ideas to construct an RFP (Request for Proposals) for something that enhances our communities, not damages them. Thank you. Chair Hardemon: Thank you very much. For those of you who haven't been here before, we don't allow any clapping, so if you are in agreeance with something that a speaker says, you can give them a thumbs up, you can give them spirit fingers, but please refrain from clapping. You're recognized, sir. Anthony Valiente: Good morning, Mr. Chairman. Thank you for having me. My name is Anthony Valiente. I've lived in Coconut Grove and the City of Miami for over 16 years now; been a member in the marine industry for over 20 years. And I couldn't agree more with the lawyer of Flagstone. I'm very much in support with it. This is a very serious decision that can impact not only the marine industry, but also the City of Miami and the tourism dollars that that -- that this industry brings to the City. For those of you that may not know, the marine industry is a very small industry, it's one that's grown for many years, and we risk that growth by turning this down. As Mr. Gerald Burton mentioned, you know, the mega yachts coming into the City will City of Miami Page 5 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 definitely bring tourism dollars to the City. Once you start to delay or stop that process, that only hurts the whole economics, the business end of the marine industry, and the City of Miami. As that begins to trickle downwards, as he mentioned, you know, where you start to create doubt for these mega yachts to be able to come here, it just wipes the glare off for that opportunity that we have as a city who bases a lot of our incentives on tourism dollars. You know, when you wipe that glare and you wipe that opportunity away, something that's been worked hard on to attain, it's just very -- it's a shame, to me, and I think it's an opportunity that we risk losing if this does not go into the favor of Flagstone; you know, I can't stress that further. Once you have that glare wiped off, no matter what happens in the long run, because -- let's face facts. This is not a simple case, as he mentioned. This is a very difficult decision, and one that will not end here. I mean, if we're stuck with the decision that Flagstone is faced to force some lit --is forced to get into litigation, all we're doing is just delaying or even severing that ability to be the mega yacht city of the world, and I think that that's an opportunity that we should not lose, so I hope that, you know, it's voted in our favor. Thank you very much. Chair Hardemon: Thank you very much, sir. You're recognized, sir. Michael Barrineau: Excuse me. Thank you, Chairman and Commissioners. My name is Michael Barrineau. I live at 110 Washington Avenue in Miami Beach. I'm here as a board member of Miami Beach United, as well; the leading public and political activist group in Miami Beach, founded back in 2012. We've been engaged on this issue for a number of years, and I will keep my specific comments brief, since Mark hit most of our primary concerns, which are around traffic and mobility between Miami and Miami Beach. And we would just ask you to please, you know, please take this factor into consideration. We don't believe it's been adequately addressed. And we passed a resolution a few weeks ago around the idea of interjurisdictional mediation. You know, that's what we -- you know -- we would appreciate you taking us into consideration prior to the -- prior to it being necessary for interjurisdictional mediation. And I have brought a copy of our resolution, MBU's (Miami Beach United) resolution for you to take a look at. If you don't mind, I'd like to give it to the Clerk, please. Chair Hardemon: Please. Thank you. Mr. Barrineau: Thank you very much. Chair Hardemon: You're recognized, sir. John Kearns: Hello. My name is John Kearns, of Coconut Grove, and I'd like to state that the Commission has it backwards. Instead of giving Flagstone a hard time, I believe you should give them an award. For the last half century, the big boat market has left the City of Miami; let's be honest with ourselves. We have a better city than Broward County, but all the big boats go up there. Flagstone was the first one who spent tens of millions of dollars of their own money to bring the big boats back. Secondly, I -- my company has done millions of dollars' worth of work for Flagstone. I have seen them firsthand, in real time. They refuse to cut corners. They had a chance to cut corners on millions of dollars' worth of environmental work; they refused to do that. I have seen -- I -- and from my experience, they are the best of the bunch. They pay their bills, they don't lie to contractors, and they get the job done. So having said that, I hope that the Commission will accept the good work and the personal investments of tens of millions of dollars back into the City of Miami to bring the big boats back. Thank you. Chair Hardemon: Thank you, sir. You're recognized, ma'am. Sharon Kirby Wynne: Thank you. My name is Sharon Kirby Wynne, and I live at 801 North Venetian Drive, Miami. I'm one of the litigants that was denied standing when we City of Miami Page 6 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 challenged what we believed then; the violation of the City Charter by a misinformed Commission. We still believe it, and given the last false Charter amendment, may well sue the City again. Beyond the Charter violations, I remain concerned about the following: The current MUSP (Major Use Special Permit) modification application was -- keeps changing when challenges are made to the legality of approving it by a warrant; the City's pronouncements that the June 2, 2014 deadline to commence construction of the marina was met; the City's protestation that the May 1, 2017 deadline to commence construction of the retail and garages was met; the Commissioners being misled of liability in 2014 by an Assistant City Attorney, and the cover up by the City Attorney by approving a lawsuit against the Commission of Ethics - - on Ethics; the City's readiness to approve an MUSP modification in 2016, without regard to the challenges faced by sea rise and sea surge; the City's eagerness to do anything to keep the project alive, despite two commercial real estate booms where finances were not provided to the developer, while all around the City, major retail and hotel construction exploded; the City's failure to conduct proper studies, meeting State standards in 2002, 2013, and 2017, which would have helped the Commission consider the possible requirement to build two more lanes on McArthur to mitigate the impact of the private development; the City's eagerness to look the other way on defaults and more defaults, as if that was irrelevant to the requirement that the developer meet financial standards. Who permits the City officials to behave this way? Stop this project and send a message that integrity is required in the future. Thank you. Chair Hardemon: Thank you, ma'am. You're recognized, ma'am. Vivien Noel: Good morning. My name is Vivien Noel. I live at 1281 South Venetian Way, and I'm also president of the Venetian Way Neighborhood Alliance. So I've been a resident of Venetian Islands for four years. I'm not as well versed in the subject as some other people that -- you know, since it's been going on for over 15 years. However, I may speak as myself and our neighbors. We're extremely concerned about the impact on traffic with the scope of the project, as we already feel that the Venetian Way is extremely -- the traffic in the past -- even five years -- has increased substantially. We would really like to see a new traffic study if this project was to continue forward. Specifically, we have our doubts, given the disaster with Jungle Island, and how that negotiation went down, and we've seen small return for everything that the City has given. We think that a lot of things have changed in Miami's landscape in the past 15 years, when this was first -- initially approved. We think that the markups that we've seen for the project are not at all in line with what we would see at the City landscape. We think that it would significantly alter it, and we have concerns, because our understanding -- Although I understand the marina has brought a lot of visibility to Miami and Miami Beach, and we think it's great, I think that's what impact the least. What's more in question is the further development that still has to happen. We're very concerned to know that Flagstone was operating a restaurant without permit for several months. So when you see a project of $100 million, they have a whole team of lawyers, I find suspicious that they didn't know that they needed a permit to operate a restaurant, and that raises question as to how they pro -- they plan on proceeding in the future. Thank you. Chair Hardemon: Thank you very much, ma'am. You're recognized, sir. Trevor Hart: Good afternoon. Thank you all for your service. My name is Trevor Hart. I live at Northeast -- 750 Northeast 64th Street, in Miami; right up Biscayne. I have learned quite a bit about the status quo in Miami as I've watched and experienced the machinations of City officials in regards to major development projects. I live in Nirvana. Some of you might know about it. I watched with shock and sadness as the City Attorney persuaded a court to deny standing on five cases where citizens sought to have a court determine whether the City itself brought -- broke its own Charter; and with delight, last November, when 84 percent of the voters sent a message that the --to City of Miami Page 7 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 the City that they want integrity and transparency to hold officials accountable. I have watched with alarm and shame at the proposed development on the Upper Eastside, where yet more public property gifted in perpetuity for public use by a veteran, Harvey Seeds, is being handed over for private for-profit dev -- builders. It is time to stop this project. It is time to send a message to every employee of the City, right up through the top, that integrity is paramount. Public trust in government cannot withstand anything less than the best of standards by its employees, and through adherence to processes meant to ensure specific projects are, in fact, in our best interest and in the best interest of our beautiful community; not just more traffic, longer commutes, and unfortunate road rage into -- incidents. It is time to send a message to the developer and their lobbyists that misleading City Attor -- City officials and elected officials will bar their ability for future approvals for any projects anywhere in our City. It is time to change the culture of ignoring the law, rules of procedure, and the common sense of right and wrong that seems to be pervading our beautiful City, so please stop this project. Thank you. Chair Hardemon: Thank you very much, sir. You're recognized, ma'am. Grace Solares: Good morning, Commissioner. If I may, Mr. Chairman, I need one more minute. I would ask you that you grant it, because I'm going to be reading from the minutes of the City from January 28. I won't be reading everything, but the pertinent parts that deal with legal issues that were discussed at the time. Thank you, sir. First quote is from Commissioner Carollo. "I received the contact that you give" -- "that you gave me, Mr. Mayor, and I have serious issues with this, to be honest with you. I will tell you right now I will not approve this contract." He said that, and then he continued discussing the issue of the payments over a three-year period. And by the way, I do not actually disagree with what they did at that time, because the City was in a precipice of actual bankruptcy; that's how Manny Diaz left the City. We didn't have any money. So I guess the Mayors and Commissioner Suarez and Commissioner Carollo, who had been here for only three months -- because they had just been elected -- they were faced with a lack of funds in the City. So -- but even so, like that, Commissioner Carollo had incredible concerns, and discussed them. I will not discuss them right now, but he did. Then the discussion went further, and then was like, "Well, what about if we actually take the property back now? Could we do something with it?" And Mr. Carollo -- Commissioner Carollo said, "Should you, Flagstone, go away with the project, realistically, it is not that it is going to be an asset just sitting there; that they won't be" - - "we won't be able to obtain any revenues from, right?" Ms. Valdes from the City says, "Oh, no, no, no. We will be able to get revenues." So the next quote is from Commissioner Suarez, who came back with an argument, which was a very good argument, to assuage Commissioner Carollo's concern. But the closing of Commissioner Suarez' arguments were very interesting, and, I think, very apropos at this time, and he says, "And I spoke with the City Attorney about drafting language that will be extremely clear that would waive defenses and things of that nature so that we wouldn't be in a litigation process if they fail to make payments for the" -- "by the 10th that they would agree to vacate, which we would" -- I think, which means taking the land back -- "be a huge asset to the City of Miami to be able to move forward with that property and do something productive with it." I think that is very, very telling. But the most important thing, I think, is Ms. Bru, your old City Attorney, who came back at the end and said, "Mr. Chair" -- which was Mr. Sarnoff at the time -- "before you vote on this, I'd like to put some things on the record. The first thing is the issue of security deposit. I don't see anything anywhere where they are proffering that they will be replenishing the security deposit. That might be a legal issue. I'm not going to get into business, because the business issues, frankly, are your purview. I just want to raise that, with respect to the legal issues, the RFP requires a security deposit. I'd like to hear on the record whether or not they would be willing to deal with some sort of letter of credit or performance bond." Mr. May comes up and rejects the security deposit. Then Julie Bru says, "Second, second point that I'd like to raise is that there continues to City of Miami Page 8 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 be defaults here because of the liens; the mechanics liens. This is City property, City land. So I, for one, don't know what happened to the liens. Have they satisfied it?" May said they were going to satisfy it. But then Ms. Bru finishes with the following: "The next point I have -- a lot of discussion today before we take in this interest, and that's clear" -- "let us be clear. I do not know that they do have some kind of interest" -- "I do know that they have some kind of interest in possession, and they are agreeing that, upon a default, a payment-related default, that they will waive their defenses, but I'm not hearing anything as to what will" -- "that they will waive defenses against claims instead of not just related to nonpayment, but related to any other kind of default." Chair Hardemon: Ms. Solares, I've allowed you to speak for five minutes now. I'm going to have to bring your time to a conclusion. Ms. Solares: Okay. Mr. Chair, I'll close this way: There are some issues here that were raised at that hearing, legal issues, such as the security deposit; such as the waiver on defense for anything other than the way -- the nonpayment of the -- of what they were going to be making, the monthly payments. There is a part here that says that she will be speaking with the attorney from Shutts & Bowen, could get into that minutia, like he called it, and I don't see anything anywhere. So if they agreed to waive defenses for other things than the nonpayment, I guess if you have basis today to actually set aside this contract, they don't have any recourse to the City -- against the City; that's my point. You have to read what happened; and then, thereafter, what happened and what's there. Thank you, Mr. Chair. Chair Hardemon: Thank you very much. Ms. Méndez: Ms. Solares, just so we can make sure that it's on the record with regard to the full -- everything you read, can you say the date again so that we can get the -- Ms. Solares: Yeah. Ms. Méndez: -- minutes? Ms. Solares: The City records. I read from pages 198 through 218, portions of it, of the January 28, 2010; almost eight years ago, and we're still dealing with this. Ms. Méndez: Thank you, Ms. Solares. Chair Hardemon: You're recognized, sir. Robert Zimmerman: Good morning, Mr. Chairman, members of the Commission. My name is Robert Zimmerman. I live at 1000 Venetian Way, and I'm the president of the -- thank you -- 1000 Venetian Condominium Association. I've been involved in this issue since very early in this century. I'd like to talk today about traffic. It's a major concern for our building and for the causeway. This project early on in its literature said it could have up to 20,000 people, and even now, we all know traffic is crazy. In 2014, there needed to be a deed modification for this project to continue, and Deputy City Manager Alice Bravo went to Tallahassee to present to the Cabinet to get this approved. And in that meeting, even then, the Cabinet was concerned about traffic. And Ms. Bravo said, and I quote, "There was a discussion about the need to update a traffic study. A traffic study was updated in November 2013 that showed a favorable outcome." Well, we had been requesting through a public records request that study for six months at that point, and we had not received it. And in a future deposition, Ms. Bravo said, well, she'd only received the study an hour before. So that explained why we had not been given the study, but it also meant that no City expert had reviewed this developer's study, which turned out to not meet State standards, and the Cabinet made a decision about that. I know that you're all good, honest men, and that you work very hard for the City of Miami Page 9 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 City. I'm the president of a condo board, and that's bad enough, so I can't imagine what it's like for you, and I really appreciate that. And, you know, this project, I think, is an ill-conceived dream, and I believe that it's done, and I think that, you know, you need to put a fork in it. And may God bless this Commission and this great City. Thank you very much. Chair Hardemon: Thank you very much, sir. You're recognized, sir. Jose Suarez: Good morning. Thank you, Mr. Chairman, Mr. Vice Chairman. My name is Jose Suarez. I live at 1143 Southwest 13th Court, and I'll also just disclose that I am a candidate for City of Miami Commission District 3. I think this project is very emblematic of the questionable real estate dealings that go on in the City of Miami for years and years with our public lands. It's been 15 years, and I think any business would love to sign on the dotted line -- or resident -- to get a lease for 15 years; and in this case, not much has happened. These are public lands, and we should ensure that the public is receiving the greatest benefit from these lands. And this is a perfect example of one that I think could be used in a different way to better benefit the public, such as transportation, parks, et cetera, but this has clearly been 15 years, and it's been way too long. And I commend the Commissioners that are taking -- that have brought this to light, because I think it's so important that more and more Miamians find out about these kind of dealings, because they're the kind we should stop. Thank you. Chair Hardemon: You're recognized, sir. Edward Pascoe: Good morning. My name is Ed Pascoe, and I live at 185 South Hibiscus Drive, on Hibiscus Island. I've lived there for 28 years, and I've watched the traffic get worse and worse every year. And I'm a board member of the Coalition Against Causeway Chaos. So we were formed in 2014, following serious questions about the legality of some of the City's decisions and actions. Some of those were in 2010, revision to the Agreement to Enter a lease, violating provision which bars the Commission from even -- and I quote -- "considering rent below the market value." It also violates other provisions, particularly those requiring a new referendum. In 2013, an extension of deadlines without the developer evidence of financial liability or hotel, or retail contracts; 2014, modification of the deed after the State had declared Flagstone's payments in default and non-curable. As the Herald reported, the Department of Environmental Protection's two-year ruling was overruled by the Governor after a single visit by a well-paid lobbyist. Also, in 2014, the Assistant Attorney -- City Attorney -- knowingly and intentionally withheld rent appraisals sitting in the City's files, and misled the Commission on the subject of the liability in many ways. When a successful challenge to the Commission on Ethics reopening the case, because its own employee had not provided full information to his Commission, the City Attorney approved a lawsuit against the Commission on Ethics to block it from determining the matter on its merits. Also, in 2014, the City Attorney fought standing on five separate developments, including on Flagstone, which sought to have a court decide whether or not there were violations in the chart. And throughout all this, the Coalition -- our Coalition has put together a list of more than 20 apparent material violations of the Truth in Government provisions of the County's Ethics Code. The Coalition asked the Commission to stop the culture of violations of State law, the County Code of Ethics, the City Charter, and simple, honest processes. Enough is enough. As a personal experience of living on Hibiscus Island, we have become basically prisoners on weekends. It took me 45 minutes to get here, just so you know. But the point, I think, is here, it's big business versus the residents. And for me and my neighbors, enough is enough. Thank you. Chair Hardemon: Thank you very much, sir. You're recognized. City of Miami Page 10 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Elvis Cruz: Good morning, gentlemen. Good morning, Commissioners. Elvis Cruz, 631 Northeast 57th Street, speaking as a private citizen and not as the president of the Morningside Civic Association, as we have not discussed this issue. Gentlemen, especially Commissioner Russell, I'm very pleased that you are considering ending this 15-year mistake. Watson Island was once completely zoned as parkland, as the very nice photograph on the screen shows. This development should never have been put in front of the voters. Parkland should be considered sacred ground to be protected. Instead, the City has a long history of looking at parks as vacant lots for empire building schemes. Commissioner Russell, I have walked in your shoes. I know very well what it is like to try to enforce agreements between the City Administration and private entities, especially when both are ignoring convenient -- inconvenient truths, and selectively remembering and interpreting facts to serve an agenda. I had a lesson on that last Thursday in these chambers. But you have the facts on your side, sir, and facts are stubborn things. Keep up the good fight on this issue. I urge all of you to not only take back Watson Island for the people, but to also attack the underlying cause that has allowed this bad deal to go on for so long, which is campaign contributions from special interest groups, like developers, which are the cancer eating away at the core of our democracy. I urge you to use Miami Beach's Campaign Contribution Reform Ordinance as a starting point. They do not allow campaign contributions from lobbyists, vendors, or real estate developers; we should do the same thing here. Please bring Watson Island back to the people. Thank you. Chair Hardemon: Thank you very much, sir. Commissioner Suarez: It was quick. It's a record. Pierre Cuervo: Hi, Chairman Hardemon, City Commissioners. Thank you very much for allowing me to speak. My name is Pierre Cuervo (phonetic), and I'm from Homestead, Florida, and I'm here on behalf of the Libertarian Party down here in South Florida, and I'd like to say that, unlike many of the criticism that has been brought up today, my main focus and that of many of our members is not about the amount of boats that will be brought to Watson Island, and it's not about the amount of business that will be brought by Flagstone. Please, please, bring in business, bring in retail, bring in private development. That's great. It's all about prosperity. But there is a particular concern that we have and that I share with many -- with most of our members, and that concern could be put to rest easily today if Mr. May and if the City Commissioners can pledge today that at no point since the beginning of the lease did Flagstone ever pay under the fair market value of the property. And if at any point there was any fee that -- required by the City that was waived for any reason, we would love to have a pledge that such waivers would not be in place again. So if these pledges can be made today, then I would say that our concerns would be met; but otherwise, it would be nothing more than illegitimate and unethical cronyism. Thank you. Alex Marjoe: Hello. I'm Alex Marjoe (phonetic). I'm a resident of Miami Beach. I live on 275 South Hibiscus Drive, in Hibiscus Island for a number -- 14 years, and I've seen the traffic become more and more congested each day. I think, from 2004 till now, the landscape has changed dramatically in the City, and here, we have an opportunity before us to really do something that is positive for the residents; not just the visitors. And while I really like the idea of the marina and the mega yachts, and I think those are terrific uses, I think that we really need to look at this project not just as one particular site, but also from a global standpoint in terms of what's happening all around the 395 Corridor. And we have from a programmatic standpoint so much going on. We have a museum, we have the performing arts center, we have the Miami Airlines Arena, we have the Jungle Island, the Children's Museum, all these, which are basically --The corridor that we use to get to our homes is the same corridor that feeds to all these venues, so we basically are at a standstill. U.S.1 and other roads are not included in the traffic study, so I really would appreciate a traffic study that is updated. And we think City of Miami Page 11 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 that this is a very prime, beautiful site for the people, and it should be public, and it should be a park. Thank you. Chair Hardemon: Thank you, sir. You're recognized, sir. Ian Stewart: Good morning, gentlemen. Thank you for the opportunity to speak. My name is Ian Stewart. I live in 1000 Venetian Way, and I would say that I live in the Miami City, but I do have properties in South Beach; I drive there a lot. And I've been here since 1989, and I would say in that period, there has been tremendous improvements in the City of Miami itself; almost universally, all of it good; a tremendous improvement in the reputation of City Hall, thanks to gentlemen and ladies like yourselves. And this particular project has baffled me from the start. It's clearly extremely complicated. Clearly, those of us who just have access to the press who comment don't get the full story, so we rely on people like yourselves to make the best judgment on what is best for the City of Miami. We've all heard about the impact on the traffic, and I would reiterate that again, as a taxpayer, whether it's real value in terms of the real estate values and what the developer has access to, but my real point, I think, would be this: Is that this project has gone on for a very long time; for a prolonged period, with several questionable practices occurring. And it seems to me that if, indeed, it is a very, very big project, as the counsel said, then it's worth looking at in more depth, based on more recent traffic studies; based on the fact that the uses for which the land was originally granted have changed considerably, with an impact on traffic and other things. And so, if all of that is true, I don't see that a little bit of delay - - I've sat in City Hall in South Beach and listened to the Beach express extreme frustration in terms of the lack of consultation and the fears over traffic. And so, what I would ask is that today, we go back and we say, "If this is worth doing, it's worth taking a little bit more care, checking out the details and improving the optics," because, as -- I like to think that I'm a balanced person, but as a citizen, I have to tell you that the optics of this project look terrible. And we've heard people say that -- how important this is to the mega yacht industry, and I understand that. And I understand the need for the land to generate money for the City of Miami. I understand all of those things, but a little bit longer -- The developers had plenty of time to do this. If it was super important for the superyacht industry to have done this some time ago, 15 years is long enough to have done it. So I would ask, please, that we update everything in light of the changes in the City of Miami; in light of the changes in the project permissions that were originally granted. Thank you very much. Chair Hardemon: Thank you, sir. Ma'am, you're recognized. Debora Arditi: Hi. My name is Debora Arditi, and I live in 1000 Venetian Way, and I'm here to support Commissioner Ken Russell and ask you all to help us fight against this project that will make traffic and our lives dreadful. Thank you. Chair Hardemon: Thank you very much. Martha Bueno: Good morning. Chair Hardemon: Good morning. Ms. Bueno: My name is Martha Bueno, and I'm here as the vice chair of the Libertarian Party of Miami-Dade County, and also as -- personally, as a resident of Miami-Dade. My issue is not with the project itself, but rather with the fact that for 16 years, the City of Miami has taken every opportunity to give this property, deeded for public use, to the benefit of a private developer. After 16 years, the financial markets have not stepped up to support this project. There has been a boom in development during the last 16 years, yet this project needs the City to finance it. The project has gone through delinquencies in payments, and yet, has been granted five extensions in the past seven years. This has City of Miami Page 12 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 cheated Miami residents out of income. It has allowed a private company to benefit while the residents of Miami are being cheated out of additional benefits. The City is only charging the developer $2 million in rent when the current appraisals put it at over $7 million. This -- Let's allow the City to take back its land and allow the market to find a project that will not only benefit the City, but will not continue to cost us lost opportunities and lost revenues for our City. Thank you. Chair Hardemon: Thank you very much. You're recognized, sir. Bruce Matheson: Good morning. Bruce Matheson, 3191 Grand Avenue. I'm here on behalf of Commissioner Russell's efforts. In the Miami Today, June 2014, it stated, "The developer expects full completion of the project by December 2017." A year later, in the June issue of Miami Today, "The entire project finished in time for Art Basel 2017." The project -- this was in 2014 -- enters -- "When the project enters its fourth year of operation, Mr. May said it will mean millions to the City in rent, taxes, and fees." Well, on the course they're on now, that's not going to happen for another six and a half years. You put that on top of the 15 years already, you're talking 21 and a half years. That's not good at all. The land belongs to all the residents of the City of Miami. It's time to get the land back. Thank you. Chair Hardemon: Thank you, sir. Welcome back. Cynthia Hernandez: Thank you. Good morning, Commissioners. My name is Cynthia Hernandez. My office address is 4349 Northwest 36th Street, 33157. And my message - - my testimony today is very simple and short. We are discussing public lands, and therefore, these public lands should be used to the greatest public benefit. This City is obviously in great need of transit and more parks; or at the very least, if this development does go -- continue to go further, let's make sure that we get a better lease to reinvest in the communities that really need it. Let's ensure that we follow responsible wages and living wages, both for long-term and short-term workers on these projects. And finally, you know, let's remember that as elected officials, you work for our communities; not just the small percentage of developers and contractors that live in the City. Thank you. Francine Liebman: My name is Francine Liebman. I live at 1000 Venetian Way, and I'm a business owner in Miami Beach. Nobody talks about the quality of life. Miami Beach is in the spotlight all over the world, and if we don't produce a beautiful park for tourists -- you want tourists to come here. It's not shopping centers, it's not major hotels. It's something for them to want to be part of and us, as the City, and I think we should give back the park to public land. Chair Hardemon: Thank you very much, ma'am. Seeing that there is no other person that wants to speak for public comment, I'm going to allow the attorney for Causeway Chaos to have seven minutes to address this body. Mr. Dubbin: Thank you, Mr. Chairman. As we said, I'm Sam Dubbin, representing the Coalition. Ms. Méndez: Mr. Chairman, before -- I'd like to say, before he starts with his presentation, I would ask that it be limited to the contract and not to bring up anything with regard to one of my attorneys. That is in a different forum, and that is nothing that needs to be addressed by you, and I would ask that he be given that direction. Chair Hardemon: The direction to -- Mr. Dubbin: Mr. Chairman, there's -- City of Miami Page 13 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Chair Hardemon: Sir, sir, the direction should be followed, and I'll ask the City Attorney, if you hear statements or facts that lean towards that discussion, then you make me aware of it. But, sir, you know, we're here on this. I'm allowing you to speak. This is not the forum that you're using that, you know, you'll use to sue, so we just want you to provide your statements so that we can move forward. Vice Chair Russell: I'm sorry, Mr. Chairman. I'm not sure I understand what it is that we're barring him from speaking. Ms. Méndez: He's just going to defame one of my attorneys, like he usually does, and that is in a separate -- it's in a separate venue, and I don't think it's appropriate for him to continue doing that and using this venue to do so. Vice Chair Russell: I could understand that, obviously, but this is before my time. I just simply don't know the context, necessarily, with regard to what he's not able to say at this point. Mr. Dubbin: And for her to use the word, "defame," Mr. Chairman, is completely inappropriate. I thought it was announced beforehand that there wasn't going to be ad hominem attacks. Right now, the Dade County Commission on Ethics has a matter in front of it, which they voted 3-2, to look back at what happened in May of 2014, and there's a lawsuit to try to stop that. That's all a matter of public record. Ms. Méndez: At a different -- it's a different venue, and that is my point. Mr. Dubbin: It -- Ms. Méndez: He just cannot continue to bring it up here before you, when it has nothing to do with the task at hand, and that is what I'm asking, out of respect, for him to stop doing. Mr. Dubbin: Well, I'm going to address the issues about the agreements that the City has with Flagstone, and the breaches. Chair Hardemon: I'll -- You know, as lawyers, we tend to have lots of information that we can use at our fingertips. And civility under the Florida Bar has been a major concern for the lawyers that practice and we know that, and we've made new promises towards civility. And so, this is not a court of law. This is a matter of dealing with public comments. And so, I just want you to follow the direction that's been given to you through the Chair. And I'd also just like for you to stick to the facts, so as to not -- just - - let's just stick to your arguments to -- regarding this matter, if you could. Mr. Dubbin: I will. But just to make it clear for this record, Mr. Chairman, the only right now was by Ms. Méndez -- Chair Hardemon: Listen to me, listen to me. Mr. Dubbin: -- against me, using the word, "defamation" -- Chair Hardemon: -- you're -- Mr. Dubbin: -- and that's unacceptable, and that's what happened so far. I'm here to talk about this agreement, and the history, and the -- what the terms say, and why the failure to commence construction by May 1 is a terminable breach. Okay? Chair Hardemon: Okay. Now, so you stated your goal. Now let's fulfill that goal within seven minutes. City of Miami Page 14 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Mr. Dubbin: So Flagstone filed a letter on Friday afternoon, with a number of arguments about why it should be excused from missing the deadline. What's missing from Flagstone's letter, conspicuously, is the actual definition of what it require --is required under the City's agreement to meet the deadline. That came about in September of 2010, when, as you recall, Flagstone had paid nothing between 2001 and 2009, and the City was about to hold them in default. So Flagstone came to the City and asked to amend the agreement so that it could develop the project in phases, and get an extension from February 1, 2010 to September 1, 2013. And as part of that agreement, this Commission issued what's called "Composite Attachment 3," or Exhibit 1 to your September 23, 2010 resolution. And Composite Attachment 3 is -- became incorporated in the Agreement to Enter the Ground Leases, which was modified and completely amended in 2010 -- September 2010. And the definition in this agreement says that -- throughout this exhibit -- "'Commence construction' or 'start construction' shall mean that all material plans and permits are approved and issued, and the actual act of physical construction has begun." I'll repeat that. "All material plans and permits are approved and issued, and the actual physical act of construction has begun." That's what was required to be done on May 1, 2017, with regard to the retail parking portions. Now, this Composite Attachment "A" is made a part, and adopted and incorporated in the Agreement to Enter, as well as the retail parking component Ground Lease. So there is no question that the applicable standard for Flagstone to have met in order to remain in compliance is that all material plans and permits have to be approved and issued, and the actual physical act of construction has begun. What -- so I notice that in Flagstone's letter, they don't try to make the argument that all material plans and permits have been approved and issued, because they can't, because they haven't. As it is, when -- What kinds of plans and permits have to be approved? A major use special permit and a building permit. They do not have a building permit for this site. They had a major use special permit approved in 2007, and Flagstone has tried to amend it 11 times since then, including as recently as May 5, and every time they've tried to amend it, it's to -- well, their -- they tried to increase parking over and above what the DRI (Development of Regional Impact) allowed. They tried to bring in 136,000 square feet of retail that had never been approved before, and they keep going back to the drawing board. So without a major use special permit, you can't have a building permit. And they don't have a major use special permit that they're operating under, and they don't have a building permit. So all material plans and permits have obviously not been approved and issued. Now, the letter from Flagstone and Mr. Bustamante's argument was that, well, they got a phased foundation permit. By the way, that was issued on May 4. But for -- to be clear, the phased foundation permit was only for the fish market of the marina; not the entire retail and parking components. And the fish market of the marina was only part of the 2007 MUSP; it's not even part of the application for a MUSP modification that Flagstone has been trying to get the City to approve. And I would further say that to speak in terms of having a phased permit satisfy the definition of "all material plans and permits," you look to the definition of what a phased permit is. And under the State law, the holder of a phased building permit for the foundation or other parts of the building are -- Ms. Méndez: Where are you reading from, Mr. Dubbins \[sic\]? Mr. Dubbin: I'm reading from an email from you to Ken Russell, dated June 10, 2016. Ms. Méndez: Thank you. It would be nice for you to say that. Mr. Dubbin: I'm also citing Section 105.13 of the Florida Statutes. The Building Code is governed by State law, and the idea of the phased permit is authorized by State law, but it says that, "The holder of a phased permit for the foundation or other parts of the building or structure shall proceed at the holder's own risk with the building operation, and without assurance that a permit for the entire structure will be granted." So, by City of Miami Page 15 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 definition, a phased permit cannot be all material plans and permits, because the applicant has to admit right up front that they may not get a Master Building Permit, all material plans and permits. So to cite a phased permit for a -- in any respect as having satisfied the definition of the contract is completely fallacious, and an insult to the English language, because "all" means all material plans and permits have to be approved and issued. And by the way -- and, you know, in a phased permit, you can't build above the ground level. And to make it clear, when this phased permit was approved finally, on May 4, there were people within the City staff who, I think, were doing -- working hard, diligently trying to do the job right, who said, "Okay, for phased permit only per chief of land development request." Now I'm reading from the iBuild records that you have to go online in order to get. This is for the phased permit for the marina fish market. This is a preliminary review; not a planning final approval. The phased permit is not -- all caps -- the Master Building Permit. However, it would allow for an early start of construction for the marina and fresh market portion of the project upon the applicant filing a hold harmless letter; preliminary review, only; phased permit review only, per the MUSP modification of 2007. So this is a -- and this is clearly -- the phased permit is not all plans and permits approved and issued. Then they talk about a utility permit, which wasn't issued until May, and they cite extensively Section 6 of the Agreement to Enter, Article -- this is what Mr. Bustamante has cited, and this is what Mr. Stearn \[sic\] cited in his letter. And they cite Section 6.1.13(B) of the Agreement to Enter, which talks about obtaining utility permits, okay? But Article 6 of the Agreement to Enter is a provision that requires a number of conditions precedent to occur prior to the time the City can enter into a Ground Lease for this parking and retail portion. And it says -- and (UNINTELLIGIBLE) -- getting the utilities laid is one of them, but there are 15 others, such as construction plans and specifications have to be approved by the City Manager. Now, we've been getting public records for the last, you know, year and a half, and have not seen anything from the City Manager approving the plans and specifications. Closing construction loans, that's a condition precedent to having a Ground Lease for each major component. Flagstone shall have closed its initial construction loan with an approved initial construction lender, which financing thereunder, together with the amount of initial equity requirement, is -- whatever Flagstone may determine to invest -- shall be sufficient to complete the development and construction of the applicable major project component. So one of the conditions precedent -- Now, again, we've never seen proof they have a construction loan, and we've never seen a waiver by the City Manager. There's the development team; there's the operating team; there are construction contracts, construction budget, construction schedule; bonds, and letters of credit. These are among the other conditions precedent. And the -- Section 6.1.13(B), that's cited by Mr. Stearns and by Aldo Bustamante is part of a condition precedent about project approvals. Part "A" says, "The partial modification of restrictions from the State, the MUSP approval, the NOPC (Notice of Proposed Change) approval and foundation permits shall have been issued by the applicable government authorities for the development of this particular project component." Then it says -- what they cite -- the utilities have to be laid. Well, they don't have a MUSP approval; at least not one that they've sought a building permit for. So for them to say that there's -- we're going to pick one sub-part of 16 different conditions precedent and say that, "Because we are digging a trench under that, we've satisfied the condition of 'all material plans and permits have to be approved and issued,'" again, is completely misleading and does not do a good -- not do a service to the Commission or the public, because it's not what the contract requires. Chair Hardemon: Counsel. Mr. Dubbin: Now, the -- Chair Hardemon: Counsel, you've had eight minutes now to speak. City of Miami Page 16 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Mr. Dubbin: Could I have two more? Because there are some very important elements here that I -- Chair Hardemon: I've suggested that you had seven minutes -- Mr. Dubbin: Right. Chair Hardemon: -- very clear. Mr. Dubbin: How much did I have to spend defending myself? Chair Hardemon: To get those seven minutes, you spent about 12, and now, your time has come to -- Mr. Dubbin: Well, let me close by saying the following, okay? The crux of the matter here -- and again, if -- I respectfully would request that if things were said by Flagstone that I can show you -- and I've got a lot of information here -- are not true, I would respectfully request in the public interest that I have the chance to go up and say these things, because I got 20 things that are wrong in their letter, and seven minutes is just not enough to say that. But the crucial element now is, what's the consequence of this? And as Commissioner Russell's resolution states, the key is Article 6 of the agreement, of Composite Attachment 3. And Composite Attachment 3, by the way, is made a part of every one of these agreements. And what it says is that if the marina component does not start construction by its deadline -- which was September 1, and then it was extended to June 2, 2014 -- or both the parking retail components do not start construction by -- it was 9/1/2016. It was extended to May 1, 2017 -- then Flagstone's right to build any component expires and seizes; the Agreement to Enter is terminated. The City retains all prepaid construction rent as consideration for the extension of times that were given, and Flagstone must turn over to the City immediately the applicable Ground Leases. Flagstone also agrees to waive its defenses as to failure to begin construction against the City immediately. And that's -- Chair Hardemon: Thank you. Mr. Dubbin: -- and that is a -- that is -- According to Section 11.19 of the Agreement to Enter, a provision of that Composite Exhibit 3 that has an automat -- a termination provision -- is not the kind of default that -- where there has to be notice and opportunity to cure or not. And again, I can cite that at the appropriate time. I've shown it to several of you I've had a chance to meet with. But then there's -- Chair Hardemon: Counselor -- Mr. Dubbin: Provision 7 -- Chair Hardemon: -- you have 10 minutes you've now been speaking. I gave you seven. Mr. Dubbin: Last, last point. Chair Hardemon: I'd ask that you respect, you know, what we're trying to do here in maintaining a fair meeting. And other -- and I -- Mr. Dubbin: Thank you. Chair Hardemon: -- try to be the most gracious person in giving time, and not cut people off at two minutes to give you an opportunity to wrap up, but I have to wrap this up now. Okay? City of Miami Page 17 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Mr. Dubbin: Thank you, Mr. Chairman. Vice Chair Russell: Mr. Chairman. Chair Hardemon: Thank you very much. Yes, sir. Vice Chair Russell: I would like to hear a little more if it has to do specifically with -- Mr. Dubbin mentioned that there are other elements of the Stearns Weaver letter that are actually incorrect. And I think he's actually been quite fair with not defaming anyone. He's been very clear to the point of the legal issues that we're talking about today, and I have not heard that before. It's not an emotional plea; it's not something about traffic; we've heard these things before. But he's speak -- If he's going to speak directly to the letter at issue that we're dealing with -- I haven't received a counter- opinion to this letter from our City Attorney to really study the facts on it, so I would be open to hearing a little bit more. Mr. May: Mr. Chairman, with all due respect to Mr. Dubbin, three of his clients actually spoke as part of the public comment period. You gave him seven minutes; he's taken 10 minutes. Every time you give him an inch, he takes a mile; one minute turns into three minutes. I understand that Commissioner Russell may want to hear more, but all of you have been briefed on these issues by Mr. Dubbin, so I don't think it's right to gain the public comment system -- Commissioner Gort: Mr. Chairman. Mr. May: -- to say, "I want just a few minutes," and then you have three of your clients speak; then you get up and take more time than you were afforded. It's really just not appropriate. Chair Hardemon: Commissioner Carollo. Commissioner Carollo: When you said we've been briefed by Mr. Dubbin, you mean just now or privately briefed? Because I haven't been privately briefed by Mr. Dubbin, so I don't know where that information is getting. Commissioner Gort: Mr. Chair. Chair Hardemon: Can you --? Commissioner Carollo: And not to mention that you just described what someone described Flagstone has done for the past 15 years. Commissioner Gort: As I look at the audience in here -- Applause Commissioner Gort: Hey. As I look at the audience in here, I can see a lot of individuals that haven't been here that long. There's a lot of history in here. I would like for him to finish. They'll get a chance to rebuttal that. So if you don't mind, I think - - Commissioner Suarez: I'm good with that. Commissioner Gort: -- and I just got out of bed to be here today, because I think it's very important. But I think for him to finish and -- Chair Hardemon: Can you address -- City of Miami Page 18 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Commissioner Gort: -- and then he can be rebuttal. Chair Hardemon: -- the comments that the Vice Chairman would like for you to address? Mr. Dubbin: Thank you. Thank you, Mr. Chairman. One of the statements in the letter is that it is simply whether a legal right exists to unilaterally terminate contractual rights. In fact, no right arguably exists to terminate the agreements. That's from Mr. Stearns' letter. Now, what I just read you from Article 6, makes it clear that that's incorrect. In fact, the -- according to Article 6, it terminates automatically when the deadline is missed. And Article 7 of the same Composite Attachment 3 reinforces that what he's saying isn't true, because it says, "Notwithstanding anything to the contrary in this Exhibit 'A,'" -- it's also Composite Attachment 3 -- "if the retail parking components do no commence construction by the 72nd month, 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, the retail parking components, and any hotel components on the balance of the project and the property." That's in Composite Attachment 3, and it's part of every document in this -- it's part of the Agreement to Enter and it's part of the Marina Ground Lease, and it's part of the Retail Parking Ground Lease. And their argument about the damages that they would suffer is also, I believe, not availing, as a matter of law, because they have waived their defenses. They -- You know, what I've heard from people is that, "Well, they're going to say that since they were given liberality in meeting the June 2, 2014 deadline, they had a right to sort of expect that they were going to get, you know, someone looking the other way when it came to the May 1, 2017 deadline," or that it's the City's fault. Now, that's not a legal defense. If they did not have all material plans and permits approved and issued, and commenced the actual physical act of construction, they have waived all of their defenses. So the -- and what's interesting about that argument is that the -- this Commission anticipated that that might be made at the time this was -- the agreements were entered into, because it provided that, again, with Composite Attachment 3 being completely -- It says, "Subject to unavoidable delay, construction of the applicable major project components shall commence in accordance with the construction schedule set forth in Composite Attachment 3." Ms. Méndez: Mr. Dubbins \[sic\], where are you reading from? Mr. Dubbin: I'm reading from page 113 of the amended and restated Retail Parking Ground Lease. It was -- Chair Hardemon: Are you -- Mr. Dubbin: -- Section 14.2. Chair Hardemon: -- just so I can follow, are you still addressing the comments -- Mr. Dubbin: Yes, yes. Chair Hardemon: -- that the Vice Chairman (UNINTELLIGIBLE)? Mr. Dubbin: Yes, because they made the argument that these are the defenses that they have to not meeting the deadline; that they're going to suffer damages and they're -- that these are -- and that it's the City's fault and the City dragged its feet, and that's why they haven't met it. So subject to unavoidable delay, construction of the applicable major project components shall commence in accordance with the construction schedule that we talked about. So the agreement defines unavoidable delay. "'Unavoidable delay' City of Miami Page 19 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 means delay on account of force majeure events." Now we all know what force majeure events are. "Such terms shall be deemed to exclude delays on account of any lack of funds or economic conditions, and typical ordinary delays in obtaining any permits or other approvals from governmental authorities. That, by definition under this agreement, is not available to the developer as a basis for why it didn't meet the deadline. And they further go on to say here that they have diligently and timely proceeded to advance their project. Now what in the -- and in 2015, January 2015, they filed a -- you know, maybe their fourth major use special permit modification application. And the City of Miami Beach, which voted to investigate the traffic impact of this project, wrote a letter to the City Manager of the City of Miami, saying, "We have concerns about the applicant" -- " January 2015 application, because it looks like it violates the development of regional impact, that it shouldn't be approved as a warrant," and the like. So that letter was sent in April of 2015. Remember, the MUSP application was January of 2015. On February 26, 2016 -- this is -- I'm reading from a letter now from Daniel Alfonso, City Manager, to the City of Miami Beach. "We would like to inform you that Flagstone Island Group, LLC, as of the date of this letter has not submitted to the City a formal application for a MUSP modification. The City advised the applicant of the procedures, documents, and fees required to complete the application for a MUSP modification, but the City never received an application from the applicant; as such, the City has not reviewed, nor made any determinations or findings related to the MUSP modification dated January 14, 2015, because it is incomplete." It's an incomplete submission. That incompleteness has not been addressed in the interim time. That's a 13-month delay where the developer was not responding to what the City Administration had required is -- in order to process the major use special permit. And then in June 28 of 2016, the -- Flagstone asked the City's Planning staff how things were going with their MUSP modification application. And in an email from Rafael Rodriguez to Natalie Galay (phonetic), dated June 28, 2016, the City Planning & Zoning Department wrote: "Good afternoon, Natalie. I advised my colleagues that were in attendance in the meeting you mentioned, and prior to signing the warrant notification letter, Planning would like to see the plans that you will submit as part of the warrant application. Can you please submit said plans at your earliest convenience?" So that's June, so that's a year and a half after the January 2015 application, and they still haven't supplied the informa -- basic information. So when Mr. Stearns says that Flagstone has diligently and timely proceeded with the construction of the major components, that's not consistent with the record. Let me just say one thing in -- to -- in closing here; maybe -- and maybe this was the most egregious of all: Finally, in November of 2016, Flagstone did have a new MUSP modification application, and the City Planning staff recommended that it be approved as a warrant. Now, that means without public hearings, without PZAB (Planning, Zoning & Appeals Board) review, without a Commission review; basically, administrative approval. But they insisted, as part of that application, that Flagstone provide an up-to-date traffic study. That was October 16, 2016. The traffic study Flagstone submitted didn't even arrive in the City until May 10. Now that's after the May 1 deadline. You can't get the MUSP approved without the traffic study, and you can't get a building permit without the MUSP approval; and yet, the so-called diligent developer didn't even get the traffic study to the City prior to that May 1 deadline. And as one of the other witnesses stated, the City -- the Florida Department of Transportation informed the City of Miami Planning staff and Transportation staff that what Flagstone had done before wasn't a sufficient traffic study; that the passage of time and the impact on the Miami Beach side of the project had to be examined as part of the traffic study. That was the edict of the Florida Department of Transportation applying State law, and the Miami-Dade County Transportation Office seconded that. So in one of my public records requests --and again, I think there are some outstanding public servants in the City who are trying to hold the people doing business with the City accountable to the rules. The question was asked to the Transportation Office on May 16, to Irene Astoria: "Good morning, Irene. Approximately how long will it take for you to review the traffic study? Thank you." And then the response was, on May 16: "Good morning" -- this was to Jacqueline Ellis City of Miami Page 20 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 -- "Did the applicant include in their submittal response to County and FDOT's (Florida Department of Transportation) comments? We will review the document in detail; however, just taking a quick look, they didn't include the AMP and/or the requested intersections"; and, of course, you can look at that study yourself and see that the developer did not do what the -- what FDOT and Miami-Dade County said they had to do. So not only were they late, but they -- you know, they didn't even address -- You know, one of the major elephants in the room, is: How bad of an impact is this going to have on traffic throughout McArthur, including the Miami Beach side; but also on the Biscayne Boulevard side? -- which, you know, was not -- also not adequately studied. So I think I will -- I mean I -- Vice Chair Russell: Thank you, Mr. Dubbin. Mr. Dubbin: -- think I've given you a good idea of the defects, both legally and factually, in the situation that's brought us to the place we're in now. Vice Chair Russell: Thank you, Mr. Dubbin. Mr. Dubbin: Thank you. Vice Chair Russell: Mr. May, would you like to rebut and make your presentation? Commissioner Gort: I think you had someone also -- Vice Chair Russell: I'm sorry. Ms. Méndez: I think you have another member of the public. Vice Chair Russell: Yeah. You would like to add to the public commentary? Steven Kollin: Yes, sir. Vice Chair Russell: Two minutes, please. Mr. Kollin: It'll be less than that. My name is Steven Kollin. I grew up on Miami Beach, South Beach. I was born on Miami Beach, and I live on the Beach again. I am an attorney, but I'm not here representing anybody. This is a very simple issue. Commissioner Suarez: Nice. Mr. Kollin: And I remember Watson Island years ago, when we had the wooden bridges and the helicopter pad, the whirly bird, and the blimp base, and it has been improved dramatically. But this is a simple issue, and as I've said, I do not represent anybody here or anybody else who is not here. I just represent common sense. This is not an emotional or traffic issue. One does not have to be a rocket scientist to see the problem here. No one will be beaming from one location to another to get to the Watson Island project if you pass this. They won't use helicopters to get there. They will come there one car at a time, and leave one car at a time. Thank you. Vice Chair Russell: Thank you, sir. Mr. May. Mr. May: Mr. Chairman, if -- I'm not sure if you're going to give a presentation or --if you are, I'd rather wait and address everything; if not, I can -- Vice Chair Russell: Fair enough. City of Miami Page 21 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Mr. May: -- give my presentation, but just would reserve time to be able to respond to whatever is presented. Vice Chair Russell: I'm glad for -- I'm happy to make the presentation that I've prepared. Thank you for joining me for this special meeting of the City of Miami Commission today with regard to the future of our publicly-owned waterfront land on Watson Island. For those of you who are fans of watching our Commission meetings over the years, you'll see this like a groundhog day or a dé já vu, with some different faces up here. We've been here before, enabling this project since the turn of the century. There is no difficulty in just letting something continue. The status quo is the path of least resistance, but will we have the political courage today to say that something is wrong and fight for what we know is better for our residents? There are two main questions before us today. The first is whether or not the City has the legal grounds to terminate the agreement and take back the land. If the answer to that first question is "yes" -- and I believe it is -- the more important question is, what will we do about it? Will we take action? We do have the political support to make the right decision. We actually have the political right and the obligation to make this decision. Traffic is our biggest challenge as a city. We should be opposing any major intensity on this site until a public transportation bay link is a reality. If we were to go out to RFP on this site today, for sure, bay link would be a part of that RFP, and a public/private partnership that would help us pay for it and build it. If we were to go out to RFP today, we would require the new project to happen on time or lose their rights. We would require proof that they can actually finance the project. Many people came to speak today; they are more engaged than ever. They will support us for doing the right thing. On the other hand, they will also judge us for doing nothing when the right thing is staring us in the face. I have yet to meet anyone who can say with a straight face that this is a great project with a great partner, who is acting in good faith. I will make the case in a few moments that we are very much within our legal rights to take this action and survive any challenge. I will cite specifics within the lease and transcripts from a previous generation of Commissioners and their minutes that prove that the developer is in default; that there is no cure period; and that he has waived his right to even defend this breach. Before getting into these details, and knowing there will be much discussion from all sides, I will begin with a motion for item SP.1, with discussion. Commissioner Carollo: Second. Vice Chair Russell: I'm sorry, I -- Am I the Chairman now? Do I need to pass the gavel? Is that why you're coming over here? Vice Chair Russell: I can make the motion without? Mr. Min: Chair Hardemon is coming back. Chair Hardemon: I assume the Vice Chairman wants to know if you're saying you have a proper second. Unidentified Speaker: (UNINTELLIGIBLE). Vice Chair Russell: Thank you. Now that the Chairman here, I'll properly move item SP.1 for discussion. Commissioner Carollo: And I second the motion. City of Miami Page 22 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Vice Chair Russell: So I'd like at this time to draw your attention to the timeline; really, just to set the stage for how we got here from there. You'll see it in a presentation that I've handed out, which is also on the screens. Ms. Méndez: Vice Chairman. Vice Chair Russell: Yes. Ms. Méndez: Where do you have a copy of the --? Vice Chair Russell: I've -- the Clerk has a copy. Ms. Méndez: Thank you. Vice Chair Russell: You can have my copy. And I've also handed out a packet to the fellow Commissioners here to -- that's tabulated with what I'm going to reference, with page numbers. I'll try to be brief. In November of 2001, the voters obviously approved Flagstone Island Gardens Project in a referendum, in a response to a City RFP; that's on this first page here. It talks about a fish market, a maritime museum, public gardens, cultural facilities, a minimum annual rent of $2 million. In December 2002, the next year, the City of Miami entered into its first agreement with Flagstone, the Agreement to Enter into a Ground Lease. This dictated the original terms upon which the City would lease part of Watson Island to Flagstone. And then there's a seven-year gap, to which we negotiated to put together this agreement and this lease. There is our first red flag. That's the first thing that tells us this isn't happening the way we had intended, and maybe it should stop. September 20 -- 2004, there was a first amendment to the Agreement to Enter; November 2006, a second amendment; June 2008, a third amendment. In April of 2010, between then and June, on the brink of expiration, the City granted Flagstone multiple extensions, as negotiations were at a standstill. At this time, the City and Flagstone were also seeking a modification to a deed restriction from the State of Florida, for which the City was receiving some pushback. Eventually, the City and the State reached an agreement by which the State of Florida would take 15 percent stake in part of that project. I'm going to get back to that in just a moment, but for this moment -- and I'm sorry, I'm going to get into a little bit of legalese, but it's important, because it was referenced in the Stearns letter. In September of 2010 -- and if you could go to page 6 on this tabulated document, gentlemen. So in the letter that we received from Stearns Weaver last week, they claimed that the lapsed permit is not grounds for default, and they cite Article 6 of the Agreement to Enter; that's here. And this is relevant, because that paragraph only refers to the conditions precedent to entering the lease. This is not about the whole project and the whole agreement. The actual terms for default, including the nuclear option that we have now before us, is referenced in Article 11 and in Composite Attachment 3, which is referenced in Article 11. I'd like to skip forward to September of 2011, and I'd like to thank State Representative David Richardson for reminding us that the State of Florida and the City executed an agreement to modify the deed, which had originally prohibited the conveyance of land for private uses. Somehow, we got past the hurdle of convincing the State that a privately managed mega yacht marina and a privately managed hotel and retail complex is not a private use or purpose. This should have been our next red flag, and the project probably should have died at that point, as well. Back to my timeline. On May 2014, Flagstone entered into the Ground Lease with the City for the marina component. March 2016, the temporary use of vacant land permit for pop-up restaurant was approved by the City. September 2016, a temporary use permit expired on the 26th of September of that -- of last year. The restaurant continued to operate, without a permit. In October of last year, the City and Flagstone executed a Ground Lease for the parking retail component. January of this year, Flagstone received notice of violation from Code Compliance for operating a restaurant without a certificate of use and various health and safety violations. They were operating an illegal restaurant. In City of Miami Page 23 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 March of this year, Flagstone was ordered by the State of Florida Department of Business and Professional Regulation to shut down the restaurant, and was cited for 57 violations of health and food safety. In April of this year, Flagstone was notified that they were delinquent on over $750,000 worth of property taxes, due no later than May 31. They did pay those outstanding property taxes on May 22, just before the May 31 deadline, but what we have here is not a good faith partner, and we should say, "Thank God that we're catching this before the true shovel is in the ground," because if this continues in the same way, who knows where we'll be when we come back to visit this again? I want to speak a little bit to the clauses that are also in here, which reference whether or not they have a cure period; whether or not they have -- whether or not they've waived their rights to defend. So if you could go -- let's see. On page 34, I mentioned Article 11 actually gives us that nuclear option to cancel this agreement. Commissioner Suarez: Page? Of what document? Vice Chair Russell: Page 34 in this document. It should be tabulated for you. Commissioner Suarez: The Agreement to Enter or -- oh, you're talking about your package. Vice Chair Russell: Yes, my packet that my staff prepared. Commissioner Suarez: Got it. Vice Chair Russell: This is Article 11 of the Agreement to Enter the lease; events of Flagstone's default. Article 11 specifies that Composite Attachment 3 governs for certain defaults. In 11.1.9, it says that the Composite Attachment 3 deadlines have their own termination rights by the City. You see, missed deadlines are a particular kind of default, where the City negotiated more unilateral terms. Then you go to page 35, the next page right behind that. The amendment also contains a critical document entitled, "Composite Attachment 3," construction deadlines, other business terms. If you go to page 153, which is the tab right here, this document establishes the September 26 deadline for parking and retail component. Section 6 of that Composite Attachment 3, entitled "Additional Agreements Concerning Flagstone Forfeiture, City Termination Rights," states that the agreement terminates and the City may take the property back if Flagstone fails to start construction on parking retail by September 1, 2016, which has now been extended to May 1, 2017; the deadline that just passed. On page 163, Section 6 also states that Flagstone agrees to waive its defenses as to failure to start construction against the City. That's a pretty unilateral agreement that they signed. That gives us a lot of power, and it took me a long time to go back through our minutes to see what led us to that decision, and why they might have agreed to those terms. Now, the easiest way out is for us to just -- to defer to the opinion of our Administration or our City Attorney. But I believe we have a higher responsibility to get off the fence and make a solid decision, as we are accountable to the voters; not the Administration. Commissioner Suarez, you are the real estate attorney among us. You and I have agreed on many things, one of which is that, with all due respect, our City Attorney's Office does need support when it comes to major land use deals, so please take this journey with me and form an opinion, based on your interpretation and understanding of the contracts. If you see it as clearly as I do, then together we'll direct our City Attorney to take this fight and win. We don't always agree with our Administration. The lobbyist's job is to convince them that a loophole is fact; that a stretched interpretation is acceptable, if it suits the needs of their client. Short of any political roadblock, the bureaucratic momentum is just to keep saying, "yes." Well, our predecessors said, "Yes, but it's your last chance." Their predecessors said the same. Commissioner Gort, you've always impressed me as a very patient and thoughtful Commissioner, but even you, at the end of your rope seven years ago, I found in the minutes of the September 23, 2010 Commission meeting, when you said, "I want to make sure they know that if they're City of Miami Page 24 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 not in compliance of any of the agreements, you're not going to have my vote in the future." On that same day, September 23, 2010, Commissioner Dunn said, in the event that any aspect of the contract was breached from this point on that the relationship would be terminated immediately. The phrase was even used that, "They would just tender the keys to the City." The language of the agreement I just referenced reflects this, as well. The fact is there is no cure, period, for a deadline breach such as this. However, when I first discussed my resolution here with the City Attorney's Office, they said, "Of course, there'd be a cure period." They even placed it in the first draft of my resolution, which I had removed. It makes me wonder if we've actually read the agreement, because it's black and white; page 163 that I referenced, Attachment 3. Actually, I want to read that, because that's actually -- it just speaks to the fact that there is no cure period. There is no more chance if they've missed this deadline. On page 163, Article 6(A): "If the marina component does not start construction by" --I'll call it May 1, 2017, "or both the parking retail components do not start construction by the same date, then Flagstone's rights to build any components expires and ceases. The Agreement to Enter is terminated. City retains all prepaid construction base rent, and Flagstone must turn over to the City immediately the applicable Ground Leases. 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." Now, our City Attorneys might have assumed that a cure period would be in there, because no attorney worth their salt would agree to such a unilateral term. I would suggest that it was a sign of desperation on the part of Flagstone at that time, knowing they had already used up their nine lives with this Commission. This Commission was offering them borrowed time and a last chance. It gets even tougher for them, because they also waived their defense of this future breach. That means that they can talk to us today, but in a court of law, they will not even be able to put up a defense; they gave that up years ago. Regarding that waiver of defense, on January 28, 2010, in the minutes of the City Commission meeting, City Attorney Julie Bru was concerned about the ability of the City to take the property back in full if there was a breach. She stated, "So if we're really interested in getting the key back, which is kind of, you know, the concept, you take everything back, all those little sticks that are in the bundle; you take them all back, including the permits, the licenses, all of that. We need to talk about a way to be able to waive all those defenses; not just defenses as to nonpayment, because that doesn't get us all our sticks back." This intention is reflected in the final agreement, as I stated before. So again, they can be heard today, but if we find them in default, they've given up their right to fight back in court. Case closed. So now to the meat of the breach. May 1, 2017 was the deadline. It was the deadline to have all material permits submitted and approved. It was the deadline to have commercial -- commenced actual construction; all material permits approved. What you should picture in your head is that from that day forward, they would be able to finish in full, without getting another permit. Any remaining permits would be inconsequential, nonmaterial. Their letter states the list of permits and partial approvals; partial approvals, whatever that means, that they have secured. What it does not state is that they have yet to secure their Master Building Permit. They have yet to finalize a modification to their major use special permit, which they are still in process to change the entire layout of the parking and retail. To their admission, even their phased permit wasn't reinstated until May 4, after the deadline. Their red herring is in their letter, claiming that lapsed permits don't count toward default, but that comes, as I said before, from a separate part of the agreement, which only deals with conditions precedent in Article 6 of the Agreement to Enter. It's Article 11 that defines the terms of the default. What you should picture in your head that by May 1 deadline, all of these permits and decisions are done, and you should picture actual construction on a finalized plan. But today -- to this day, there is no real construction to witness; there is no finalized plan. There is some superficial prep work, but they're not going to get away with that again. On the marina, they qualified the beginning of construction by sending some divers down to look at some seagrass. You've got to be kidding. The line in the sand has been erased and moved so many City of Miami Page 25 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 times, so many times, over 15 years. We might as well say, "Hey, do whatever you want, take as long as you want, pay as little as you want, because we have no intention of enforcing this agreement." That can end with us today, because I'm inviting all of you to take part in this citywide asset. It's not just a District 2 asset. Just because it's in my district doesn't make it mine; doesn't just make it for downtown. In 2010, my predecessor said it was his dream that multimillionaires would own up to 40 mega yachts in this marina, and that they would each buy high-end condos in Brickell. That's great for downtown, but I'm here to tell you that this is our citywide asset. Free public transportation should reach each of our districts to bring our residents to the bay link, and the bay link will connect all of our districts to Miami Beach and the true treasures of Watson Island: The Children's Museum, the Jungle Island Theme Park, the heliport, the seaplane base, the Outboard Club, and an incredible green space that could have the best view of our City's skyline on the water. We can do this today and be planning immediately for a better deal, based on today's fair market value, not the pittance that we've received up to now, and that will mean a stronger general fund for our districts. I hope for your support today. I thank you for your indulgence for today's meeting for your consideration on this very important thing. I do hope for your support, and thank you very much. (Applause) Chair Hardemon: Any further discussion? Any further discussion? Vice Chair Russell: Mr. May's presentation. Chair Hardemon: Oh, yeah, I forget. Mr. May: Mr. Chairman, as part of my presentation, I'm going to ask Alan Fein, our counsel, to please come up and just give a brief statement, and then I'm going to get into the issue in detail. Okay, thank you. Ms. Méndez: There's another podium over here. Chair Hardemon: It's fine. If you want to use this lectern, you can, so -- Ms. Méndez: If you want to go over here so both of you have -- Alan Fein: Sure. Ms. Méndez: -- space. Mr. Fein: Mr. Chairman, I've been advised -- excuse me -- that I -- appearing today as counsel on behalf of Flagstone that I had to register as a lobbyist. Actually, the last time I was actually in these chambers, I was wearing my hat as the chairman of the NBA (National Basketball Association) Committee of the Miami Sports Authority, and I was reporting our success in getting a Miami Heat Franchise. I was appointed by Mayor Suarez. I haven't been there since then, but I've been told that I need to inform you that I have not -- I've never, frankly, ever thought I would -- I thought being a lobbyist wasn't on my bucket list, but apparently, I had to register to be a lobbyist, and I need to take the lobbyist ethics course on -- I believe it's June 16. But in the meantime, I have to ask you for a waiver of that to be heard. Chair Hardemon: I don't -- If there is no objection, then the waiver should be granted. Mr. Fein: Thank you. I have had an opportunity to meet with a lot of you over the years on different issues and -- but today, I'm here on behalf of Flagstone. My law firm, Maria Gralia and Gene Stearns and I worked on the letter that the Commissioner's City of Miami Page 26 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 addressed and, you know, I've listened to a lot of public statements here, and I think we can all agree that most of it missed the point that we're here today on. I found it ironic that, as everyone spoke, the item under discussion was notice of default. And frankly, until my friend Sam got up and the Commissioner spoke, we really -- didn't really hear much about the default or the purported default. So what I've been asked to do is to comment on the agreement in place, which, as I'll discuss, is not something called "An Agreement to Enter into a Ground Lease," in 2010, but actually, the Ground Lease that was entered into after all of these conditions precedent were met in 2016. So we're here today on a Ground Lease, and the question of whether or not you can terminate that. Frankly, we've had the opportunity to go through the agreement, and we've concluded that any action to declare a default and terminate, with all due respect to Commissioner Russell, would be a breach by the City, and would cause damages in excess of $100 million to Flagstone, and I believe the City would be responsible for that. And I certainly agree that the Commission has a duty to its taxpayers and its voters. It has also a fiduciary duty to its taxpayers and voters. And with all due respect, I do believe the kind of motion that's in front of you now would be a serious breach of that fiduciary duty. Okay. So my focus is narrow. It's not to talk about parking; it's not to talk about transportation, traffic, the long history of this dispute. I'm focusing on the merits -- I'm not focusing on the merits of the project. I'm focusing on the agreement. So it seems to me there are three questions. First, was there a default by Flagstone on the Ground Lease? And my conclusion is: No; not arguable. Second, if you assume against all facts that there was a default, was it curable and was it cured? The answer, beyond all dispute: Yes and yes. If you assume -- again, against all facts -- that there was a default and there was no cure, can the City cause a forfeiture of Flagstone's interest, take away the marina, as Mr. Matheson and Mr. -- Chairman -- Vice Chairman Russell and others have suggested; just take it away and take Flagstone's right away under the agreement? The answer is: No. And, by the way, something that no one else has talked about, even if you could, there's a document in place where this project wouldn't go away. There's a lender in place who has an agreement that he steps into the shoes of Flagstone. So all you would have done is create a $100 million liability for the City of Miami, and gotten your vengeance against Flagstone. So that's what this is all really about. Now, I'm going to talk about each of these questions, those three questions I just laid out for you. But I just want to give you an overview. This is not a close question. This isn't a situation where somebody comes in and says, "Oh, close call" or, you know, "Mr. Commissioner, if you vote this way, you" -- "a 40/60 chance you might win; 30/70." There is virtually no chance, no chance that you could win on this claim; no chance. And the reason is -- This is the reason why contracts are put together the way they are. There's a reason why there's certain language in agreements that stops a city, when its leadership changes, from saying, "You know, I don't really like the decision that old leadership made," or "I don't like the decision they made, or that the facts have changed, so now, you know, I'm going to throw out that contract." That's not the way it works. You can't do that. You can't -- You can do it, but you have to -- you have the fiduciary duty to your taxpayers to explain to them how you set them with a $100 million claim. So let's start with the three questions. First, was there an arguable default? The answer is: Clearly not. The Ground Lease required Flagstone to start construction by May 1, 2017. The next date in the agreement is to complete construction, 4/30/2020. So there's a three-year period of time there. And why is it that way? Why would someone - - Why would the City agree to that, and why was that language in there? Frankly, to avoid this very situation, where if some -- if a Commissioner feels, "Oh, you're just moving dirt around after you've commenced construction, that's not good enough, in my eyes. That's not good enough." You know what? You really don't have anything to complain about until the completion of construction date is missed. The construction commenced. It's up to the contractor to finish on time. A contractor can't be dragged back before courts or arbitrators or cities of -- or the City Commission over and over and over again during that three-year period. So did construction commence on September 1, 2016? Frankly, it's undisputed. And it's undisputed that September 1, 2016 is eight months prior to the date required under the contract. That is, with all due City of Miami Page 27 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 respect, the beginning and the end of this argument. Your staff has confirmed this. This case, if it were a case, would be over. But wait, wait; we have new arguments. Start construction -- and the definition of "start construction" says all material permits and approvals have to be issued for construction to start. And Mr. Dubbin, my friend Sam got up here in front of you and said, "all" means all. "All" means all. Commissioner Russell, "all" means all. With all due respect, that is gibberish. In my first day of law school at Georgetown University Law Center, the famous Richard Alan Gordon, my contracts professor, invited us into the classroom, and he said, "When you walk through those doors and you begin to interpret contracts, please bring two things with you. Bring your notebook and bring your common sense." Bring your common sense. So how is that applied here? Actually, Mr. Bustamante applied his common sense last week when he was asked to opine on this. And what did he say? Your staff breathed some fresh air into this situation. He said, "No project has ever required permits from ground excavation to move-in ready at the time of groundbreaking. Permits obtain as part of the work commences, i.e., drywall, windows, mechanical, et cetera." You're not expected to have all those permits in place. Was there a permit in place to start the job, start construction? Of course, there was; it's beyond dispute. Did construction commence? Of course, it did; it's beyond dispute. That's why Mr. Bustamante concluded -- again, last week -- "Those permits required in the agreement have been met to date." But wait, wait, there's more. One of the permits lapsed. It lapsed, and according to the argument, even though the lapsed permit was approved by the City on April 28, it wasn't issued until May 4, so it's gotcha. "We gotcha. Lapsed. Default. No defense. Kick them out." Again, respectfully, I have to say -- and Commissioner Russell, we've talked about other issues in the past, and I -- and you're a good man, but I have to say I believe this argument is wholly and completely frivolous; and, in fact, it's banned by the agreement. The agreement says at 6.1.13(B), "The temporary lapse is not an event of Flagstone's default." The fact that Flagstone, during the fall and spring of May '17, was attempting to make modifications in order to address some of the concerns and get the garage -- at least part of the garage underground -- led to this purported lapse. But in any event, they were acting in good faith; and, without a doubt, there are no facts to suggest that they weren't; and as a result of that, 6.1.13(B) holds. That is no solace for the City. And that leads to the next bogus argument. The objectors say, "Well, let's assume that there really was a default when there wasn't. Let's just terminate them." And with all due respect, that is what we in the law call "wrongful termination," and that's what subjects you to these profound damages. And there's been some discussion about, well, the Agreement to Enter into a Ground Lease says that there's no defenses, there's no cure for defaults, it's over, terminate. It's very interesting that Mr. Dubbin talked about this 2010 Agreement to Enter into a Ground Lease, but nobody's talking about the Ground Lease. What does the Ground Lease say? I would submit that if you look at Section 25.1 of the Ground Lease, it provides for a 60-day default -- cure period after the City has given notice of a default. Of course, that wouldn't get the City anywhere in this situation anyway, because the default, if it had actually existed, has already been cured by the issuance of the permits on May 4. So whatever rabbit hole that the Citizens in Favor -- Against Chaos want to take you, it is utter legal nonsense; it takes you nowhere. Forgive me. And finally, as I mentioned briefly, the -- this issue about, "Let's just take over the property and have it for ourselves," respectfully, that doesn't take the City anywhere, either, because, again, under the SNDA, Subordination, Non-Disturbance Atonement Agreement with the lender, the lender -- Well, why would the lender want this? Why would they want non- disturbance? It's obvious why they would want this. Commissioner Suarez: Mr. Chair. Mr. Fein: They wanted to avoid this very situation where years, months, days after construction begins, somebody can come in and say, "Let's put a halt to all of this," okay? If that happens, the lender steps into the shoes of the developer, so all you've really done is taken your pound of flesh from Flagstone. You will have accomplished City of Miami Page 28 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 nothing, but you will have perfected Flagstone's wrongful termination action against the City. I appreciate the time you've given me. I will leave you with the thought that Flagstone has now invested over $110 million in this project to date. When the objectors filed their multiple actions against the City, Flagstone intervened on behalf of the City and represented you in court -- your position in court and this contract in court against them, and they prevailed. And if there's a question about whose legal opinion to believe, I would submit that the opinion of your City Attorney and Flagstone's attorney would seem to have stood the test of time better than the legal opinions of the attorneys that have represented the Coalition to date. Again, I will just quote my partner, Gene Stearns. At the end of his letter, he said, "We recognize that it's difficult to sit before a crowd made angry by false claims and try to explain the truth to people with little interest in listening." Here, there is no legal choice. What is being suggested now is that the valuable arena is complete. The City should simply take it. And my friend Gene said, "There are countries in this world where governments can do that kind of thing, but America isn't one of them." For all of those reasons, I think it would be utter folly for the Commission to pass the resolution that's before it. Thank you. Mr. May: Thank you, Alan. Mr. Chairman, Brian May, representing Flagstone. I'm going to get into really more of the detail, but I want to pick up on something that Alan mentioned, which is, I think -- let me start by saying that it's important for all of us to understand that there -- at this time, there really is no dispute or controversy between the City and Flagstone. In fact, the City Administration and Flagstone have been completely aligned on the issue of whether Flagstone has met the construction deadline for the parking retail component. The only dispute or controversy at issue is one that has been created by the Coalition Against Causeway Chaos, and as we all know, they've been doing this for years. So you ask, why all of this at this time? Why has it come to such a culmination, come to such a head? The reason is, is because this is literally their last chance to stop the project, and they're actually trying to entice you to step up and terminate the agreement. They have sued the City and Flagstone a total of three times; all unsuccessfully, I might add. They personally sued your employees, filed ethics complaints against them, badgered your staff with allegations of corruption and malfeasance. And this entire issue before you today, respectfully, Commissioner Russell, has been driven by the Coalition and the dozen or so letters that they have sent all of you, dating back to the fall of last year on this issue. I want to note for the record that there's been -- there's no expansion in the MUSP (Major Use Special Permit) that was filed, which was stated earlier. Flagstone has paid the City $6.3 million of rent since 2010. Flagstone is current on their rent, they're current on their deposits, their letters of credit. And I just want to put that on the record. There's been talk of, you The citizens aren't rising up. The Coalition for Causeway Chaos -- or Against Causeway Chaos is rise up yet again. Of the 18 people that spoke, four were from Miami Beach, four were from the Coalition Against Causeway Chaos, one from homestead, and one in Miami-Dade County. So 10 out of the 18 -- right? -- were either interested parties by virtue of previous litigation or the Coalition members, or they did not even live in the City of Miami. Unidentified Speaker: I haven't spoken yet. (UNINTELLIGIBLE). Mr. May: So on the one hand, the Coalition for Causeway Chaos, they like to -- they allege that Flagstone did not commence construction on time; and on the other hand, they've done everything in their power, whether through litigation, attacking your City staff, or sending voluminous letters badgering people to keep Flagstone from actually commencing on time. And they know -- all of this, okay, they point to -- they're very arrogant about what they're doing. Basically, what they're saying to the City and to know anything. Your Planning Department doesn't know anything. Your Public Works Department doesn't know anything. Your City Attorney's Office doesn't know what City of Miami Page 29 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 don't know what they're doing. Their engineers don't know what they're doing. Their developers don't know what they're doing, but we, the Coalition for Causeway Chaos, you today to please reject that and look past it, and look past that noise. But the good news, Commissioners, is that despite all of this ingenuous efforts of the Coalition, the reality is that Flagstone did start on time. And your staff, despite the relentless badgering and pestering and intimidation tactics from the Coalition, has actually done a pretty good job over the last few years of holding their ground and trying to do the right thing. And I would say to all of you on this dais, rather than scold your staff or criticize them, you should actually commend them for that, because they're just doing their job. But as Flagstone was forced to do in 2014 when the Coalition raised the very same issue as it related to the mega yacht marina component of the project, which was completed, by the way, eight months ahead of time, and is now open for business, and paying the City in excess of a million dollars annually, we will again today address the frivolous allegations of the Coalition. We will show you very clearly that Flagstone, by any measure, and by any measure of your professional staff, has, without question, commenced construction of the retail parking component ahead of the required deadline of May 1, 2017. Now, how did we actually get to this hearing today? We got to this hearing because Commissioner Russell alleged on May 12 in his statement, related to his pocket item, that Flagstone defaulted by not commencing construction for the retail component of the -- by the required deadline. And his statement specifically points out the cause for the default as the lapse in the foundation permit of Flagstone as the cause for a default. Today, Commissioner Russell has stated that that is actually not the issue; that that actually points to a different part of the agreement; does not hold to what the default is. So now the default -- he's saying the default really doesn't count. What's most interesting, though, any specific cause for default, and instructs staff to simply send a default notice to Flagstone with particularity, but none specified in the actually resolution. And, Commissioners, the reason for the resolution doesn't say that is because there is no default. In fact, the Ground Lease, as you know, specifically says that a lapse in a permit is not a cause for a default if Flagstone acted in good faith to reinstate the permit, and they did. They had a foundation permit in September of 2016. They had an inspection on that in February of 2017. The permit lapsed. In good faith, they filed for the new permit, the new phase foundation permit on the very day that the first one was said to expire, and it was issued by your staff on May 4. And I think your staff will say to you and tell you that it's not as to Flagstone's fault in any way that it was issued on May 4. So what you have today, Commissioners, as Alan Fein actually alluded to, is you have a choice today. Either you make a professional decision based upon the facts, which are very clear and confirmed in total, not just a little bit, completely by your own staff and Manager; or you make a political decision simply to appease a vocal minority, many of which who don't even live in the City of Miami, who simply don't want the project. And I would submit to you, the days of whether we want the project or not, those have passed us. That was resolved in 2001 when we entered into the agreements; when there was a referendum held and approved by the City of Miami voters by 67 percent; and it was again reaffirmed in 2010, when you accommodated the project -- not willy- accommoda the Great Recession, the worst economic downturn since the Great Depression. So the City didn't afford Flagstone the opportunity to extend the agreements and, by the way, start paying preconstruction rent -- okay? -- which we started immediately; you did that because there was a viable reason. So I just want to put that on the record. So, as I said, there's no question that Flagstone met the deadline, but let me start with your p the facts. It's important to note that the key permits that are called into question by the Coalition are ones actually issued by your own staff, not by any third party; by your own staff. And Aldo wants you to know that Flagstone has relied upon the direction of your professional staff on a regular basis, and in fact, has had regular meetings every City of Miami Page 30 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 single week with your staff when construction on the marina component started back in early 2014. So for three years, over three years, we're meeting with your staff on a regular basis. They discussed these permitting issues ad nauseam, every day, all the time; and somehow, we wake up because the Coalition for Causeway Chaos sends 15 So let me just walk through -- just want to be able to point to this. So -- Thank you. Bustamante to Daniel Rotenberg on May 4, and this is in response to the press writing a story that the Coalition -- and there's -- there has been a potential breach -- right? -- which has been brought to light by email posts, social media, mass emails, and the numerous letters from the Coalition for \[sic\] Causeway Chaos. Here's what it says from your own staff: "The phased foundation permit was obtained by Flagstone on September 1, 2016. On February 28, an inspection was conducted by orders par the construction requirements, the first phase of work is the utility relocation work. Flagstone obtained their FDOT permit, WASD (Water and Sewer Department) permit, DERM (Department of Environmental Resource Management) permit, Department of Health permit, WASD sewer, and DERM sewer permits in 2016. 2016. And the Coalition is trying to lead you to believe that Flagstone is not moving forward in good faith to get the permits and construct the job, beginning before May 1, 2017. They got all of these permits in 2016. Flagstone changed contractors. They obtained their preliminary permit from the City of Miami Public Works on April 26, 2017. This is for the utility relocation. Very important. You can't begin to build much of the foundation - - you can't begin to build the project until the utilities are moved to the outside of the project, to the borders of the project. First act of construction is to move the utilities on the upland, number one. No question. They obtained their preliminary permit, and they actually began the site work improvements on April 28; again, prior to the May 1 retail completion. It's really that simple. So let me get you now to the second email from Mr. all material -- Alan Fein actually touched on it, briefly. Commissioner Russell and Mr. Dubbin actually believe that "all material permits" mean you have to have every permit for the job. I submit to you, that is -- it's borderline ludicrous. There's not one project in the City of Miami that is built that has all their permits for the entire project before they commence construction, and Mr. Bustamante mits for full construction, no project has every required permit for ground excavation to move-in -- to the Flagstone agreement, those permits required in the agreement have been met to staff, every step of the way, has confirmed it, and they have actually guided and talked e project from ground to finish. Sorry. Right? So Mr. Bustamante clearly says that's not the case, right? Now, it's pretty clear what we mean, but if anyone disagrees with that definition, then all we need to do is actually look to how the City and Flagstone have treated the issue and the -- if, God forbid, this ever got litigated, that's precisely what a court would do if there was any question or ambiguity about it. So let's go back to 2014, and let's talk about the marina component. At that time, the Coalition came forward with this very same issue, and pressed the issue of whether Flagstone commenced construction. That was on the City of Miami Page 31 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 marina component almost three years ago to the day. Now, you can see in my own testimony that I actually walked through all of what were the material permits to actually begin the marina component of the project, the marina component. What are those? Well, we got a permit to dredge from the U.S. Army Corps of Engineers. We got mitigation permits and an ERP (Environmental Resource Permit) permit from South Florida Water Management District; a Class I Permit from Miami-Dade County, formerly DERM, which is now RER, and those were actually the permits that we needed to begin the mitigation of the marina project, which was the first act of construction. The City Commission actually agreed with that. Actually agreed with that. The issue of whether we started or not was actually discussed before the Commission. And on July 10 -- again, this is July 10, 2014, from your own meeting minutes -- Commissioner -- and I read the email electronic -- to verify that the City's position is that they have commenced construction -- at the time, Alice Bravo, who, by the way, is a qualified engineer -- for her to come up and first phase of the work, environmental mitigation. Mitigation work is tied to the benefits is is -- absolutely is the first phase of construction. Ms. Méndez: Mr. May, what is the date again (UNINTELLIGIBLE)? Mr. May: July 10, 2014. Ms. Méndez: Okay. Thank you. Mr. May: July 10. So again, back in 2014, the City Commission hears all this, right? Professional staff testifies, and it's clear as day -- and everyone agrees -- that construction has started, right? Here's a really interesting point, though, about those ed the marina. If you notice, not one of those permits is from the City of Miami. They're actually from third parties: Miami-Dade County DERM, DEP, South Florida Water Management District. we're now determining whether we've commenced construction and had all the material permits, we not only got all the permits -- and I'll demonstrate those for you in a minute -- from all the various agencies at the County. We also actually got the permits from the City for the phase -- first foundation permit and for the utility relocation. So clearly, Commissioners, there is a significant amount of precedent that's already been set by this Commission; and now, three years later, to go back as a City Commission and override We're going to change the rules, and we are actually going to have a different standard And I would purport that for you to do that is really dangerous and would actually expose the City to a great deal of liability. But first, let me walk you -- what I'd like to do is actually walk you through the various permits that have been gotten to establish that construction has commenced, and I'm going to have my able assistant here and associate, Tim Gomez, actually pass out a couple of handouts to you and actually put them into the record. Now, Mr. Dubbin and others have made an issue about the minor modification to the MUSP, an approved 2007 MUSP that Flagstone filed back in 2016. And Mr. Dubbin's right. There was additional retail that was ancillary to the hotel uses, which, by the way, is allowable under your City Code in that MUSP -- initial MUSP modification. But after this Coalition for Causeway -- Against -- I always say "for" -- Against Causeway Chaos sent numerous letters badgering the City -- and it was pretty apparent that we were not going to get a minor modification signed letter from the City of Planning & Zoning until these issues were resolved -- Flagstone actually modified that MUSP application to take out any of the ancillary retail that was associated with City of Miami Page 32 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 the hotel uses, and take the project exactly down to where it was originally approved. So contrary to what people have actually submitted on the record here today -- and you have a full MUSP timeline that is sitting before you, and you can review it at your leisure -- Flagstone actually made adjustments to the MUSP to actually shrink the size of the project, to reduce the footprint by 8 percent, to take the parking down below so that the back of the project would no longer have a parking deck on it when it met the Causeway, but actually would have a functioning retail and other components. So I want to put that on the record, because it's really important that you understand Flagstone's not trying to get anything more. We're not asking for anything more. All we want is our minor modification application letter to be signed so that we can move forward with the warrant process. I will also note to you that Flagstone did submit a traffic study on May 10, 2010, but we submitted that study upon a verbal request, as I understand it, from the City; not a written request. Had we gotten a written request back in 2016, we would have conducted a traffic study back then, but we didn't get anything but a verbal commitment. Why? Because people in your Administration are very hesitant to put things in writing on this issue and on this project, because every time they do, the Coalition Against Causeway Chaos launches some letter, or diatribe, what? I don't want to put that in wri did. But let me talk you -- walk you through the permits here, because as you can see, there's a number of them. First thing Flagstone did in June of 2015 was get a WASA -- a Master Water and Sewer Agreement from WASA. Second thing they did in February of 2016 was get a Water Relocation Permit from WASA. Then on the very same day, they got the Sewer Relocation Permit from WASA. On March 21, 2016, we got the DERM Water Relocation Permit. We got a permit from the Florida Department of Health on March 24, 2016. We got an FDEP (Florida Department of Environmental Protection) Sewer Relocation Permit on August 3, '16. And on August 31, 2016, Flagstone delivered the Ground Lease to the City, and the City of Miami signed the Ground Lease. There have been -- I would call them "irrelevant" -- allegations made that Flagstone did not meet the conditions precedent under the Ground Lease; and I would say to you, the City and its staff went through their due diligence on every one of those conditions precedent. They accepted what was submitted, and they signed the d Lease. There's no question the City has accepted it and has signed on it, and we have an agreement with the City in that regard. In September 1 of 2016, as I alluded to -- and now we get to the requisite, the really important permits -- the City Building Department issued a Phased Foundation Permit. It was the first foundation permit issued on September 1 on '16. On September 2, 2016, we actually got the WASA Sewer Relocation Permit. Again, these are for the utilities, okay? The FDOT Utility Relocation Permit we got on October 3, 2016. And on February 28, 2017, the City inspected the phased foundation work on site of Flagstone, and that is in your packet. That inspection report that you have is all sitting right in front of you. You have that inspection report, and it is clear as day that work was performed under the permit; that it was actually partially approved by your City staff. Back to the relocation of utilities. We get a preliminary issuance of City Right-of-Way Utility Permit on April 26, 2017, and we actually commenced construction on the utility relocation on April 28, 2017, and that work is ongoing continuously as we speak. If you go out there today, trenches are being built, pipes is getting out to the site. It's all happening, and it's happening right now. Now, this Phased Foundation Permit, in September 1, '16, that actually expired on March 1, 2016. On the very same day, as I said earlier, that that Phased Foundation Permit was set to expire, Flagstone applied for the second Phased Foundation Permit, which was actually issued on May 4, 2017. So I don't know how the City -- how you, as Commissioners, could look at the record of what's here in black and white, clear as day, and come to the conclusion that Flagstone did not act in good faith to commence construction; that they did not actually commence City of Miami Page 33 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 construction; that they did not pursue the permits in good faith, because they did. It just doesn't make any sense -- or that they didn't have all the required or material permits to begin construction. It's right here. Not -- long -- look, long before. February 28 is the first inspection. That takes -- that's three months before month -- before May 1, two and a half months. So I say to you, Commissioners, I would ask you today to just consider the evidence. Look past the noise, right? Look past the scream understand that, but you have an agreement with Flagstone, and an attempt to actually call a default on that agreement by virtue of what's been alleged here today is not going to end up well. It's not going to go well, because of the very body of evidence that's just here in black and white. So I would ask you to carefully deliberate this. You have a responsibility under those agreements to act in good faith and to live up to them, as Flagstone does. If you notice, I haven't blamed anything on anybody in this -- e is no fault. There's no default. It's very clear and it's very simple. So I would ask you today to actually vote down this resolution. And because of all of the negativity and all the skirmish that has been caused by this very hearing, I would ask you to instruct your staff to issue a letter in good standing to Flagstone so that they can actually move forward with their retail tenants prospects and their hotel flag prospects, and actually finish commencing the job. So with that, Commissioners, I'm going to close the book here. I'm available for any questions. I would like to reserve time, as well, for our counsel to deal with any legal issues or issues that are raised by Mr. Dubbin, or things that we feel need to be addressed on the record. And I appreciate your time. Chair Hardemon: Thank you very much, sir. Commissioners, this is the time for further discussion. Miriam Merino: Can I speak? Chair Hardemon: May I ask who -- Ms. Merino: Can I have a little word, or is the time for the public to speak over? Chair Hardemon: Right. I closed the public hearing -- Ms. Merino: Oh, okay. Chair Hardemon: -- earlier in the day. Ms. Merino: Oh, I didn't know. Chair Hardemon: I gave everyone an opportunity to speak. And then, after I did that, I gave Mr. Dubbin -- pronounced it correctly? -- Ms. Merino: Okay. Chair Hardemon: -- an opportunity to speak. Ms. Merino: Okay, I'll be sending them -- all of you an email. I just was hoping that people could hear what I had to say. Chair Hardemon: Why didn't you speak during public hearing? Ms. Merino: I wasn't aware that -- I was waiting for -- I'm not aware of the process, so I was just sitting here, waiting for everybody to finish speaking, listening to all the arguments, and then giving my opinion. City of Miami Page 34 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Chair Hardemon: Were you here from the very beginning? Ms. Merino: I was here at 11 o'clock; was the time that I could make it. Chair Hardemon: Oh, so -- did you -- were you -- you have two minutes. Ms. Merino: Okay. My name is Miriam Merino. I'm a resident of Brickell Avenue. I've been living in Miami since 1982. I'm not a part of any coalition, but I feel, personally, a little insulted that being part of a coalition is a little bit negative, like the gentleman kept on saying before. The Coalition is a lot of citizens, like you and me, together in strength to be able to have our little voices that don't have millions of dollars heard. I was not convinced by the Flagstone arguments or the rhetoric. 15 years or so have passed. Two mega boom of construction have passed, and they lost their opportunity. I think there has been a lack of responsibility, lack of organization, and bad faith involved in this project. I think 16 years is enough time to correct and start your construction. I personally work for a big developer, and I know that if we don't start our construction in a year and a half, you know what? We have to return all the deposits, and the developer is done. Just a second more. I was taking some notes. Oh, yes. Another thing is that one other -- the last speaker -- I'm sorry; I did not catch your name. You said that Flagstone has paid their rent on time. Well, that's good, but paying the rent on time is not the entire contract; you also have to come through with whatever specifications the contract said. And again and again and again, all I keep on hearing is amendment after amendment after amendment after amendment. That means that the person that has the lease or the contract is not going through what they stated they were going to do. The fact that they started moving a little bit of dirt, I have seen developers do that also in order to convince their buyers that they're not late on the construction. It's just a little scam thing they do to show that the construction has started. I have seen that myself as a realtor that works for developers. And in reference to all departments, like they stated before, that Commissioner Ken Russell said that every single department has to be on time. I wrote with \[sic\] Commissioner Russell said, and he said, "The major material permits need to be on time." The explanation of the permits -- that we couldn't see it; the public was not able to read it -- did not really have a time frame that was believable for me. So the argument for Flagstone, I was not convinced, and I hope that this Commission votes to rescind this contract. I personally want to thank Commissioner Ken Russell, who was elected to the seat by us, the people, and he's doing exactly what he promised; to represent us, and not the few special interests. Commissioner Francis, Commissioner Gort, Chairman Hardemon, I urge you to be courageous in defending the will of the people and voting to cancel this (UNINTELLIGIBLE) with Flagstone. 16 years and no final project clearly shows this developer is not the right entity for the future of this site. Chair Hardemon: Ma'am. Ms. Marie no: One more thing. To the City Attorney, Victoria Méndez -- Chair Hardemon: Ma'am -- Ms. Marino: Please, I want to personally ask you to change your focus back to doing what is right for us, the people that you're supposed to represent as part of the City -- Chair Hardemon: Ma'am? Note for the Record: The Chairman turned off the microphone; therefore, speaker's comments were not transcribed. City of Miami Page 35 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Chair Hardemon: Ma'am, ma'am, thank you. Your time has expired. You used three minutes and 14 seconds. Mr. Dubbin: Mr. Chairman, I -- there are some -- several serious misstatements of fact and history which I would like to address, if you would indulge me? I think it's very important after their presentation. Chair Hardemon: So let me ask you a question. So if -- earlier we gave you a chance to show in this letter that was sent by opposing counsel that there were misstatements of fact in that letter. Mr. Dubbin: Right. Chair Hardemon: You went well beyond that letter and made several more arguments. Mr. Dubbin: Sure, but -- Chair Hardemon: (UNINTELLIGIBLE). Hear me for a second. Mr. Dubbin: -- there were things that were stated that were flatly untrue. Chair Hardemon: Hear me for a second. You began talking about letters that the City Manager sent to other municipalities. I mean, you just talked well beyond these things. And so now, once again, you're telling me that there were some -- basically, I mean, lies that were put on by opposing counsel or some of the representatives. And so, my question to you is, why should I believe you now that what you're going to tell me is the truth; not just some argument that you're making on behalf of the people that you represent? Mr. Dubbin: Well, what I told you before was the truth, Mr. Chairman. Chair Hardemon: Okay. Mr. Dubbin: Because I -- when I talked about the City Manager's letter showing that they delayed 13 months without even responding to the City's questions was in -- directly in response to what was in that letter. Chair Hardemon: Okay. Mr. Dubbin: Okay. Chair Hardemon: So I -- but we gave you significant amount of -- Mr. Dubbin: Sure. Chair Hardemon: -- time to make an argument that we really did not have to do. So comfortable voting on the issue, because we haven't had a chance to debate it, as well, and I'm sure that our City Attorney has something that she wants to put on the record. But what I don't want to do is further a battle, if you will, between yourself and the opposing -- Mr. Dubbin: Sure. I understand. Chair Hardemon: -- team. City of Miami Page 36 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Mr. Dubbin: But when Mr. May says there was no written request for a traffic study in 2016, and I'm looking at a document dated 10/13/2016, signed by Jacqueline Ellis of your Planning Department, that said that the warrant would go forward with the conditions that an updated traffic study shall be required prior to the issuance of the warrant. Said traffic study shall be reviewed and approved by the Office of transportation. Now, that's in writing, and that's in 2016, and Mr. May said there wasn't any written requests for a traffic study in 2016. Mr. May: Mr. Chairman, your own -- Chair Hardemon: May I see that (UNINTELLIGIBLE)? Mr. May: -- staff will attest that the letter was never given to Flagstone. That letter, a minor modification -- the letter actually signing the minor modification was never delivered to Flagstone, ever, and to this day hasn't been delivered. Chair Hardemon: So I'm reading from this modification referral. At the top of it, the name, Tamara Allen Frost, dated 10/5/2016; her signature is put on it. It is on a document that has a City of Miami se proposed modification based upon technical findings by the Office of Zoning, comments pursuant to Article 7, Section 7.1.3.5 D1 of Miami 21; analysis from the Office of Zoning. The requested changes may be processed through a warrant, subject to the -- -- Ellis, on 2 -- 10/13/2016; has a signature below, so two different people have signatures. And this one reads -- I'm assuming that -- Mr. Dubbin: "Conditions," Your Honor -- Mr. Chairman. It's "conditions." y shall be required -- I'm sorry -- e; that the number of parking spaces are increased by the ancillary uses. The increase shall be included in - -- -- I -- this document that you referred to, do you have any indication that this was delivered to opposing counsel? Mr. Dubbin: Well, it was in response to a direct request -- Chair Hardemon: Sir, do you have --? Mr. Dubbin: -- by -- it was a modification request that they made, and it's the City's response. Chair Hardemon: My question to you is, do you have any evidence that suggests that this was delivered to opposing -- to your opposing side? Mr. Dubbin: I can tell you that there were conversations about a parking -- about a traffic study between the City and Flagstone after that. Chair Hardemon: Do you have any evidence that shows that this was delivered to the opposing side? City of Miami Page 37 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 with you, because they had a deadline of May 1, 2016, which had been granted to them in November of 2015 to -- and they were pushing for a warrant as a way to get their MUSP modification approved. Chair Hardemon: Mr. City Manager, have you seen this sort of document before that's in my hand; this type of document? Mr. Alfonso: No, Mr. Chairman. And my director told me that that was communication going on between two departments. Chair Hardemon: So this is -- I read it to appear to be some sort of interoffice memo. Is there any indication that this interoffice memo would have been provided to opposing -- I don't know -- those who represent Flagstone? Mr. Alfonso: I do not have any indication, but Mr. Garcia, do you? Mr. Dubbin: Mr. Chairman, that was posted on the City's website -- Chair Hardemon: One second. Let me -- Mr. Dubbin: -- as a warrant application -- Chair Hardemon: Let me -- Mr. Dubbin: -- that was approved on November 1. Chair Hardemon: -- hear from our staff. One second. Please. Francisco Garcia: For the record, Francisco Garcia, Planning & Zoning director. Yes, of course. Eventually, we, as staff to the City, communicated to the applicants for the warrant that this was a requirement. Initially, however, we had to determine whether or not this was a requirement that would be a part of the warrant. And what I think you have there is the communication between the Planning & Zoning Department and the Office of Transportation, to determine what the appropriate method would be. Chair Hardemon: So is this the way that you communicate with each other? Mr. Garcia: Of course. Chair Hardemon: Once you communicate with each other, what information do you provide to an applicant? Mr. Garcia: We have had countless meetings with the applicant, and what we are trying to determine at that point in time is whether or not we have all the data, all the documents, plans, et cetera, that we need to deem the application for the warrant complete, and then begin the processing of the warrant. Again, these conversations are in many instances -- Because of the sheer number of documents that attend one of these processes, these conversations are had live at many meetings that we have with the applicants. Mr. May: Mr. Chairman, with all due respect, this is irrelevant, because there's an approved MUSP from 2007 that Flagstone is operating under. The required permits were gotten to commence construction, and construction commenced. This is more noise. This is more fodder, okay? I will put on the record that the City actually did issue a warrant notification and sent out letters, in fact, on October 31 of 2016. And City of Miami Page 38 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Flagstone, issued by City invoice, actually paid $90,000 for the warrant process to begin. Yet, we didn't receive the minor modification letter. So -- and part of the reason is, is shortly after that occurs, beginning on November 21, 2016, January 25, '17, February 16, '17, March 3, '17, March 30, '17, this Coalition Against Causeway Chaos is sending letter after letter into the City, trying to paralyze the staff, and that's exactly what they accomplished. It's as simple as that. -- Chair Hardemon: (UNINTELLIGIBLE). Mr. Dubbin: -- for their failure to get their permits all done in time? Sounds like, you know, like you're -- Mr. May: I'm not, because they were done in time -- Mr. Dubbin: -- blaming my partner. Mr. May: -- Mr. Dubbin. Mr. Dubbin: But there's not one word -- Chair Hardemon: What it shows me -- what I'm seeing is that -- look, when I look at this -- the ballot question authorizing the lease of land on Watson Island, the vote was in 2001, November 6. I always hear people say, who come here -- and many people have said it before here. Commissioner Russell actually said it, too -- his; for this thing that we -- that we're discussing today. I was particularly moved by Attorney of Commissioners, and how we protect, as a whole, the contract -- in a contract, you protect those who have some sort of contract. So I'm -- what I'd like to hear more about is -- and I -- that information that you provided there is not going to get us there. The information -- what I want to hear more about is whether or not we do have a legally binding agreement, a contractual agreement. The information that I was -- that I saw before Flagstone was able to present their argument talked ad nauseam about the conditions pressed into the Ground Lease, and then -- but it spoke nothing to the Ground Lease, and so I was actually taken aback when I heard that there is a Ground Lease that we did execute that we are in. Mr. Dubbin: I was taken aback too, because I didn't get a copy of that until a couple of week ago. Chair Hardemon: Okay. Mr. Dubbin: But I will tell you this -- Chair Hardemon: May I finish, please? Mr. Dubbin: Okay, sure. Chair Hardemon: And so, you know, I'm trying to learn more about where we are at this point; whether or not we do have a contractual agreement; whether or not there will be a $100 million penalty that's going to be placed upon, if you will, the City of Miami at a time where we probably should come to a point where we should make some sort of agreement to restore the benefits of our police officers that will probably be in excess of -- some say $100 million, and what the downturning development market, City of Miami Page 39 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 where people -- you know, we're going to have revenue that's going to be on the decline. And so, the City of Miami has a lot of issues before it that needs to be determined. But one of the things that we all agreed is trying to respect those of the voters, and the voters that I -- -- when I see it. And the question is, if we can get -- if we get past the ballot question that -- in fact, that --I'm assuming that the Causeway Chaos crew and all of those who are against it voted against this. They were a part of the 11,600 -- Mr. Dubbin: You're making an assumption that's not correct, Mr. Chairman. Chair Hardemon: Well, I guess that could -- you're right that -- Mr. Dubbin: It's another fact in his -- Chair Hardemon: Let me say that. You might be right, because many of the people who are on the Causeway Chaos committee don't live in the City of Miami, so they couldn't vote on this matter. Mr. Dubbin: No. Chair Hardemon: So -- Mr. Dubbin: That's not fair, Your Honor -- Mr. Chairman. Chair Hardemon: So what I'm saying is this: I want to just hear more from the City Attorney about the crux of the issue, and the crux of the issue then becomes what Commissioner Russell was speaking about: Whether or not there's a violation of the agreement, whether or not we have a land lease, whether or not we have any ability to cancel where we are today because of the language that we've been discussing. That's what I kind of want to get into, and not necessarily the minutia of a memo from one department to the next. Mr. Dubbin: Well, their credibility issues are rampant here, to be honest with you, but - - Chair Hardemon: But they say the same thing about you. Mr. Dubbin: But I've showed you a document that was in writing for a traffic study that they definitely received, even though he said he didn't. Chair Hardemon: But you don't have any proof that they received it. Mr. Dubbin: Well, Mr. Garcia said he did -- they did. Chair Hardemon: And then opposing counsel said that he did not receive it. Mr. Dubbin: Mr. Garcia said that the applicant was given that. -- I don't think that's what he said. Mr. Dubbin: That's what I heard, but -- Chair Hardemon: And he's behind you shaking his head that that's not what he said, so I want the record to reflect that. Mr. Garcia, I don't think you have to clarify; that's not what I'm here for, but -- City of Miami Page 40 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Mr. Dubbin: But I'm glad you mentioned Mr. Fein's argument, because there are some things he left out of his argument and -- Chair Hardemon: But he -- it's his argument. He doesn't -- how do you know what he left out? Did you read his argument before? Mr. Dubbin: Because I'm listening to it. I did cite the actual Ground Lease. That -- the he City for dragging their feet, that's from the Ground Lease. That's what I cited to you. But let me tell you what he omitted, which is important. This Ground Lease talks about the entire together with all the exhibits hereto and any future easement agreements or other documents and the -- and the Agreement to Enter -- agreement between the parties concerning the property. This Amended and Restated Ground Lease shall supersede and control over any and all prior agreements and negotiations between the parties, whether oral or in writing, which are expressly merged into this Amended and Restated Ground Lease, except for the Agreement to Ent-- Commissioner Suarez: What -- where are you? What section is that? Mr. Dubbin: That's -- -- Commissioner Suarez: 38.3? Mr. Dubbin: -- "final Ground Lease," 38.3. So the Agreement to Enter remains completely alive. Commissioner Suarez: That's on the lease. That's on the lease. Mr. Dubbin: Would you like me to read that again, Commissioner? Commissioner Suarez: No, no. That's on the lease, correct, the Ground Lease? That's from the Ground Lease? Mr. Dubbin: That's from the Ground Lease. Commissioner Suarez: That's from the Ground Lease, yeah. Mr. Dubbin: Now, I would also say that somehow, he's telling you that the Ground Lease is everything now, and that the Agreement to Enter shouldn't be given any respect, which is false under this agreement, but they're relying on this 6.1.13(b), which is one of the many conditions precedent in the Agreement to Enter. So they're continuing to try to rely on something -- Chair Hardemon: So let's look at this from a bird's eye view. Commissioner Suarez: Mr. Chair. Chair Hardemon: Before -- Commissioner Suarez: If I may? Chair Hardemon: You have one opinion about it. Mr. Fein has another opinion about it. Both of you are attorneys. I assume our City Attorney will have another opinion City of Miami Page 41 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 about it. Now I want to get the opinion of another attorney on the board, and that will be -- Commissioner Suarez: Scary. Chair Hardemon: -- Commissioner Suarez. Mr. Dubbin: Two more really important legal points, Your Honor. Chair Hardemon: But -- Mr. Dubbin: I'm sorry; I'm used to talking to judges. Chair Hardemon: No, I understand. Mr. Dubbin: I apologize. Chair Hardemon: No, I understand. Mr. Dubbin: But to argue that what happened in May -- June of 2014, when they convinced the City to look the other way with frogmen taking photographs of the seagrasses -- Chair Hardemon: You just -- you accused the City of looking the other way. Mr. Dubbin: The City. Yeah, the City gave a -- Chair Hardemon: To look the other way. Mr. Dubbin: -- an opinion that photographing seagrasses constituted the commencement of construction, because it was part of the mitigation procedure, okay? Well, what they didn't tell you was that in July of 2013, at the meeting of the City and Flagstone and The Related Group, there was an amendment proposed to that definition, and it said -- -- Yes, we did get this by filing a public record suit, which Mr. May said we've been unsuccessful. No, we've been successful, because we've been able to monitor what the City has been doing. But according to this draft, it said, -- mean that all material plans and permits are approved and issued and the actual act of construction to include mitigation and other environmental activities.'" Now, that's what was proposed in 2013. It was not -- the agreement was not changed, and yet, somehow, the opinion was rendered to this Commission that that was a valid argument to ignore the plain English language. Now -- Chair Hardemon: Let me ask you a question. Mr. Dubbin: -- the other problem is that -- Chair Hardemon: If you -- so -- that's your position. Mr. Dubbin: Well, that's my position on the mitigation issue. But the other thing Mr. May said was that they were in compliance. Mr. May: Mr. Chairman, he's talking from a draft of a document. Mr. Dubbin: Oh, Brian, don't insult my intelligence. City of Miami Page 42 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Mr. May: This is not -- the City Commission did not vote on anything. Mr. Dubbin: This is a meeting agenda that I was provided by the City of Miami, after filing a public records lawsuit, where the judge ordered these documents -- Mr. May: (UNINTELLIGIBLE) agreement that states that. There's no agreement. Mr. May: It's a draft agreement, Mr. Chairman. Chair Hardemon: He just said it's a draft agreement. Mr. May: It's irrelevant. Chair Hardemon: It's a draft agreement. Is it a draft agreement, counselor? Mr. May: It's a draft agreement, Mr. Chairman. Mr. Dubbin: (UNINTELLIGIBLE) discussed changing the definition, so -- Mr. May: It's a draft agreement. This is another attempt at the kangaroo court. Chair Hardemon: Listen -- Mr. Dubbin: With all due respect -- -- Mr. Dubbin: So -- Mr. May: -- to see if something sticks. Mr. Dubbin: -- to further address -- Chair Hardemon: (UNINTELLIGIBLE) you're making my job very difficult. Mr. Dubbin: Well -- Chair Hardemon: Let me explain. You're making my job very difficult. You know what my job is? My job is to conduct a meeting, to have order, to give people an opportunity to state what they need to state for us to be able to discuss the matters so that we can come to a vote on it. As long as you continue to do this, as long as you provide me -- listen to me. You provided me minutia documents regarding interoffice communications. You provided me draft agreements where things were discussed back and forth. What I want -- I really want to get to the crux of the issue, and I think that -- unless -- and I didn't get a chance to hear what Commissioner Suarez had to say. I gave him the floor. Mr. Dubbin: Can I say two more things? One minute. Chair Hardemon: No. Just lower your hand, sir. Mr. Dubbin: One minute, Mr. Chairman. City of Miami Page 43 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Chair Hardemon: Lower your hands, please. No, I'm going to recognize Commissioner Suarez right now. Commissioner Suarez. Commissioner Suarez: Thank you, Mr. Chair. I have a question for the Administration. How much is the construction on phase 2? What is the total construction cost of phase 2, which is the retail and parking? Amount, dollar amount. Chair Hardemon: Ma'am, please have a seat. Unidentified Speaker: Just have 30 seconds, because -- Chair Hardemon: Ma'am, please have a seat. Unidentified Speaker: -- I would like to -- Chair Hardemon: Ma'am -- Unidentified Speaker: -- clarify something. Chair Hardemon: -- please have a seat. Unidentified Speaker: All the residents -- Chair Hardemon: Ma'am -- Unidentified Speaker: -- of the Venetian Causeway -- Chair Hardemon: Ma'am -- Unidentified Speaker: -- pay their taxes to the City of Miami. Chair Hardemon: Ma'am -- Unidentified Speaker: I wanted that to be clarified. Our address -- Chair Hardemon: -- please have a seat. Unidentified Speaker: -- says Miami Beach, but we're residents of the City of Miami. Let the citizens speak, because that's what you're -- we're here for. Chair Hardemon: Ma'am, you did speak. Now you're out of order. Unidentified Speaker: Her. Chair Hardemon: She spoke. Now she's out of order. It's just the way things -- I mean, I don't come to your house and tell you how to serve dinner. Unidentified Speaker: (UNINTELLIGIBLE). Chair Hardemon: I know, but I'm telling you that this is the rules; that we're trying to operate within the rules. I don't want to go back and forth with you. Unidentified want? Chair Hardemon: Ma'am, you're out of order. You can't speak as long as you want. (UNINTELLIGIBLE) City of Miami Page 44 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Unidentified Speaker: (UNINTELLIGIBLE). Chair Hardemon: Ma'am, you're out of order. You don't want -- when people are out of order, sometimes people get removed from the chambers. Unidentified Speaker: (UNINTELLIGIBLE). Chair Hardemon: I haven't had to do that. Unidentified Speaker: Why do you give them so much time? Chair Hardemon: We've had -- -- Unidentified Speaker: We're the citizens. Chair Hardemon: -- not special interest. They have a contract with the City. Ma'am, did you get a chance to speak? I allowed you to speak after the time ended. Unidentified Speaker: (UNINTELLIGIBLE), but she has to speak too. Chair Hardemon: She spoke before the time ended. Commissioner Suarez: Thank you, Mr. Chair. Mr. Alfonso: Mr. Chairman, according to our documents, phase 2 is $31.2 million. Commissioner Suarez: 31.2 million. Mr. Alfonso: Correct. Commissioner Suarez: Do you have a closed financing agreement in the amount of 30 - - what did you say, 38.2? Mr. Alfonso: 31.2. Commissioner Suarez: 31.2. Have you seen a closed financing agreement in the amount of $31.2 million? Ms. Méndez: Commissioner, when you say "closed," do you mean --? Commissioner Suarez: I mean closed. I mean, there's a very specific industry term when a financing -- Ms. Méndez: That's what I wanted to know. Commissioner Suarez: -- is closed. I mean, it's funded by the bank. It's -- Ms. Méndez: Yes. Thank you. I just wanted to -- Commissioner Suarez: -- declared closed by the lending substitution. Ms. Méndez: Thank you. City of Miami Page 45 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Commissioner Suarez: There's lending documents Ms. Méndez: Thank you. Commissioner Suarez: And there is a variety of things. Money has changed hands. Ms. Méndez: Thank you. Mr. Alfonso: We do not have yet a closed loan; that has to do with a self-financing, I believe, but they can talk about that. Mr. May: Mr. Chairman, as part of the conditions precedent that we submitted to the City before entering into the Ground Lease, there's an affidavit from Mr. Bayraktar, which is part of your public record, that states that he will self-finance that portion of the project. Commissioner Suarez: Okay. So let's go to the Agreement to Enter, which is the condition precedent that -- I don't know -- you may or may not be talking about. So, when you look at 6.1.2 of the Agreement to Enter -- for the ones that are tracking it --it -- semicolon -- -- period, construction loan with an approved initial construction lender as defined in the Ground Lease, which financing thereunder, together with the amount of initial equity requirement or more, as Flagstone may determine to invest into the same applicable to the relevant major project components, shall be sufficient to complete the development and construction either all at once or on a component-by-component basis at Flagstone's option of the applicable major project component of the projects, and to fund any shortfalls in operation that may exist prior to project stabilization for such not an option. You have to provide -- I just read from one of the conditions precedent. Now, what I find a little interesting is, then you go to the Ground Lease itself, which you would think would track the same language as the language in the Agreement to Enter, but it doesn't; it's different, and it's a little interesting, because it says in Section 13.3 of -- little "i" - - "lessee has access to sufficient funds to satisfy the initial equity requirement as defined -- lessee will have closed upon an approved construction loan regarding one or more d that interesting, because that language is different than the language in the Agreement to Enter. Now it says, "You don't need to provide financing for the actual component part; you can get by by having financing on only one of the component parts"; which, of course, today somebody handed me, for the first time, in all this discussion, a first leasehold mortgage and assignments of rent and an approved lending instrument, in the amount of 22,000,668 for the first component, which is the marina, which was-- there was some money borrowed against it. First of all, I think the problem with that is that it evidences a extremely different scenario than what is contemplated under the Agreement to Enter. And so, that's why I thought it was important when you mentioned Restated Ground Lease shall supersede and control any and all prior agreements and negotiations between the party, whether oral or in writing, except for the Agreement to conflicts with the lease -- which, by the way, I don't know why that conflict exists, unless you're trying to find a way to get around the fact in a lease that there is a very specific requirement that for you to enter into the lease, you have to have financing that's closed prior to the lease commencement date. I don't know how you explain that; that the lease is different from the Agreement to Enter. City of Miami Page 46 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Vice Chair Russell: So you're saying, if they're in conflict, the Agreement to Enter would prevail? Commissioner Suarez: Correct. And I would further say that I don't know even know why there is a conflict. There shouldn't be a conflict, because it's very, very simple and very, very logical. And I even found it strange, because I had to reread it over and over again, 13 -- Chair Hardemon: (UNINTELLIGIBLE) continue. And also tell me, why do you think that the Agreement to Enter will prevail rather than the subsequent (UNINTELLIGIBLE)? Commissioner Suarez: Because it says it in Section 38.3 of the lease. Chair Hardemon: The agreement to -- his Amended and Restated Ground -- negotiations between the parties, whether oral or in writing, except for the Agreement to to bypass something that was in a requirement -- a condition precedent of the Agreement to Enter. I don't know why they were trying to bypass it. That's what it -- I mean, that's what it seems like. Because if -- the Agreement to Enter says very clearly, there's three component parts, and it makes sense. For each component part, you have to demonstrate, prior to getting a lease, that you can actually construct that component part. And the way to do it is by presenting a loan, a closed loan, which is im you can always stop paying. Whereas, when you have a bank -- whoever that bank may be -- at bank has put themselves on the hook, and therefore, the City has an assurance and its residents have an assurance that that is actually going going to allow for pay as y contemplated in any of these agreements, so that's a huge concern for me. And I think to me, that's -- I mean, we've had a lot of stuff on the record about whether or not they commenced construction. You know, Commissioner put something -- Mr. Dubbins \[sic\] put something, Mr. Fein put something, Mr. May put something, and I'm going to leave that record intact, as is, but I have a big issue with this clause and the way that it was incorporated into the lease, which is different from the way it was set forth in a very logical manner in the Agreement to Enter, and I still think the -- By the way, I would is a provision, which makes a lot of sense, that the Agreement to Enter -- because it's the Master Agreement; it's what we voted on -- supersedes the lease, which we do not vote on, and is negotiated by the City Manager without our knowledge and approval, it actually makes a lot of sense that the Agreement to Enter in terms of a conflict would govern, and it makes a lot of sense that you cannot make it easier than what the Agreement to Enter has specified for purposes of demonstrating that you can do one of the component parts. Mr. Fein: Can I comment on that? Commissioner Suarez: Sure, of course. Mr. Fein: With regard -- I think -- this situation comes up often in terms of contract review, and judges and juries trying to figure out what contracts mean. And very often is the case where a contract that's written in 2010 is superseded by another contract that is written in 2016. So if there is a provision, for instance, the default provision that City of Miami Page 47 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Mr. Dubbin was talking about that says -- in the original agreement says, "You can't cure a default," but the 2016 agreement between the parties says, "you can," of course the later agreement takes control. And the idea, if you read the whole contract, and you look at 6.1 of -- and this is going back to the 6.1 of the agreement -- Commissioner Suarez: Agreement to Enter. Mr. Fein: -- to agree -- Commissioner Suarez: Right, Agreement to Enter. Mr. Fein: -- that lays out -- the whole idea basically is, you know, we're going to do this in phases, and as the developer meets all the conditions precedent for the earlier to get that Ground Lease, okay, you've shown you can do something, okay? You built a marina on time and under -- in less time than you were supposed to, okay? They then negotiate the Ground Lease. The Ground Lease provides different terms than the agreement, and, of course, the later agreement is what binds you. Commissioner Suarez: Let me just -- Mr. Fein: And with all due respect, the Commission may not like it. The Commission -- my guess is the Commission was not kept out of the process, and I can't answer that, but -- this is 6.1 -- conditions precedent had been satisfied in order to enter into one or more Ground Leases, then the provision of this amendment shall terminate, except for those expressly in the language from one to the other, of course the later agreement controls. Commissioner Suarez: Mr. Chair. Chair Hardemon: Please. Commissioner Suarez: I think you're wrong on that, Mr. Fein, and I'll tell you why I think you're wrong on that. In 2010, we voted on the Agreement to Enter. So it would make sense that if there were a conflict between a document that we voted on as a Commission, as a body, and some subsequently negotiated document that the will of the Commission would want to prevail, would want to be the governing, sort of, mode of negotiations for precisely reasons like this; otherwise, you would allow the Manager to potentially negotiate more favorable terms, subsequent to the vote, and I don't think that was the intent of this Commission. I think the intent of this Commission at the time was -- and essentially did give Flagstone a second opportunity to do this project under a different construct, which was a phasing construct, but I don't think their intent was to give unfettered discretion to the Manager so that they could -- Mr. Fein: Well, I'm going to let Mr. May comment, but I would begin by saying -- Mr. Alfonso: A quick comment, if I may, sir? My staff is telling me that in 2010, when the Commission voted, it actually included a copy of the Master Agreement that would be later -- Commissioner Suarez: Sure, but it wasn't entered into until this year, correct? Mr. Alfonso: No. The agreement wasn't entered until last year. Commissioner Suarez: I mean, last year. I'm sorry. Last year. City of Miami Page 48 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Mr. Alfonso: That agreement wasn't entered until last year, but it was a copy of the record back when it was originally done. Commissioner Suarez: That even strengthens my argument, because what -- I'll tell you why. I'll tell you why it strengthens my argument, because that -- because in the two documents, you have a clear provision in the Agreement to Enter -- I'm sorry -- in the Ground Lease that says that as between the Agreement to Enter and the Ground Lease, the Agreement to Enter controls. And I suspect that the reason why it was done was so that later on, if a lease was subsequently negotiated, which it was -- and I haven't compared the current lease to the lease that we voted on -- that provision may be the same; it may be different. I have no idea. It may be the same. It may be different. I don't know. But I suspect that the reason why was because they didn't want the -- a subsequent Manager to deviate from the phasing requirement and the financing that is required of each phasing component as evidenced in the Master Agreement. Mr. Fein: Well, with all due respect, Commissioner, I think Mr. May will tell you that some of the suppositions you're making are untrue, but putting those aside, if the Commission felt like the financing wasn't in place properly, and allowed all this to go on over the last -- since September of 2016 -- just using that date, okay? Not a word about financing until 15 seconds ago, 15 minutes ago, whenever you started, okay? You can't -- Commissioner Suarez: When is the statute of limitation for filing suit? Mr. Fein: People who are in contract with others -- Commissioner Suarez: Right. Mr. Fein: -- Commissioner Suarez: Well, I'll tell you this (UNINTELLIGIBLE). Mr. Fein: Okay. Commissioner Suarez: To one of the questions -- Mr. Fein: And then to get to the result that my friend, Sam, suggests that you should just throw them out, I mean, that's not -- Commissioner Suarez: That's neither here nor there. For me, I could tell you, first of all, that I was not approached prior to the execution of the Ground Lease with any sort of discussion. Certainly, had someone approached me from the Administration and provision in here which says that we can count a lending document or a lending instrument from a prior phase as compliance for a lending instrument for the next Mr. Fein: I don't think that's what I said. If I -- Commissioner Suarez: No, I'm not saying that you said that. I'm telling you that you said that you presume that the Administration had met with us prior to entering into the lease, and I'm saying that I -- that they did not. And had they met with -- Mr. Fein: Well, I think he just said that the Ground Lease was attached to the Agreement to Enter into a Ground Lease, and that it's the same as it is now. City of Miami Page 49 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Commissioner Suarez: A proposed Ground Lease was submitted. Commissioner Suarez: I understand, but it -- for provisions that are in conflict, the conflict is governed by the Agreement to Enter, not by the proposed lease. Mr. Fein: I respectfully disagree. Daniel Rotenberg (Director/Department of Real Estate & Asset Management): Can I be recognized? Commissioner Suarez: Yeah, of course. Mr. Rotenberg: Daniel Rotenberg, Department of Real Estate & Asset Management. You mentioned before the loan. I have two personal statements -- affidavits in front of me, one of which I think I nee loan for development and construction of the retail/parking component of the project, the entity here -- Commissioner Suarez: Right. Mr. Rotenberg: -- -- that's more power for the bank loan. This is their guarantee to pay -- Commissioner Suarez: It's more powerful than a bank loan? Mr. Rotenberg: This is -- Commissioner Suarez: An affidavit? So if I gave you an affidavit right now that said that I could fund a $32 million phase 2 from a project, that would be more powerful than a bank loan? Mr. Rotenberg: If it's signed and notarized -- Commissioner Suarez: It's as good as an IOU (I owe you), right? Mr. Rotenberg: -- Commissioner Suarez: Like the movie. Mr. Rotenberg: A bank loan doesn't have a personal guarantee; this is. Commissioner Suarez: It's as good as an IOU. Right. Mr. May: Commissioner Suarez, one point for the record is -- Commissioner Suarez: Sure. Mr. May: -- I think, in all fairness, it's not as if the Administration accepted the idea that Flagstone was going to self-fund the retail parking component without context. Commissioner Suarez: Okay. City of Miami Page 50 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Mr. May: They did it because they understood that Flagstone actually funded the marina component out of their pocket to the tune of over $50 million. Commissioner Suarez: Okay. Mr. May: Right? Significant amount of mitigation in dredging; far over budget than we expected. So I just want to put that on the record. It's not as if Mr. Bayraktar has not demonstrated very clearly that he has an ability to self-fund portions of the project. And he put on the record two affidavits, okay; one stating that the equity has -- overall in the project, since 2001, is $92 million. That's number one. And number two, that he would, in fact, self-finance the parking retail component; that after having actually performed under the marina component and having it built. Commissioner Suarez: Mr. Chair. Mr. May: So I just wanted to put that on the record. Commissioner Suarez: I got it. Mr. May: That's all. Commissioner Suarez: Mr. Chair. Vice Chair Russell: Yes, Commissioner. Commissioner Suarez: Thank you. Let me address sort of that issue. I don't think an affidavit, with all due respect, is sufficient. If you look at 12.1.2 of the agreement, where Flagstone enters into the related Ground Leases for each of the applicable major projects, Flagstone shall represent and warrant to the City to the best of Flagstone's -- -- satisfy the initial equity requirement regarding such major project component." Little construction loan for the applicable major project component" -- or components, "and -- be sufficient to carry out the development and construction of the applicable major project components and to is, again, because you want to get a bank on the hook. Once you have a bank that has loaned the money, that bank has to be committed to the project with -- let's say, for example, that not -- that they had not just presented an affidavit, but let's say that they had attached to that affidavit a bank account that had $35 million in it, enough to pay as you go. Right? There's nothing that says that tomorrow, they can't withdraw that money from the bank account. Vice Chair Russell: It's not in escrow. Commissioner Suarez: Yeah. I mean, there's nothing that says that they can't take that money and put it somewhere else; or if they fall on hard times, or something else happens, they can use that money to fund some other project that they find has a higher rate of return. The reason why this language is in there is to require that a bank participate in this phase so that a -- so that the people know that the project is going to the City, at least 30 days in advance of the proposed lease delivery date for each major project component, such pro forma, budget, financial, and other commercially reasonable written information necessary for the City's review to determine the pro rata amount of the initial equity requirement for that major project component, and to City of Miami Page 51 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 determine that such initial equity requirement has in fact been met for the particular Commissioner Carollo: Mr. Chairman? Commissioner Carollo: As a follow up to my colleague -- Commissioner Suarez: Can I -- just one other thing. Commissioner Carollo: Absolutely. Commissioner Suarez: In the meantime, they failed to pay their taxes to the City, so in addition to -- which they cured, which they cured. Mr. May: I have to just stop that. Commissioner Suarez: Which they cured. Mr. May: That's so ridiculous. Commissioner Suarez: Which they cured. They failed to pay their taxes to the City, which they cured, okay? But you, know, you're asking us to take, on the one hand, on -- we haven't seen it. We don't know what account it's in. We don't know if it's really in an account. We don't know if it's in an account that they can move the money from. The documents require financing for each project component. And in the midst of all that, they default on their taxes, which they cured. Mr. May: They did not default on their taxes. Commissioner Suarez: They didn't pay their taxes. Mr. May: No. They paid their taxes in 2016. Commissioner Suarez: They paid their taxes late. Mr. May: Hold on. Exactly the same time they paid them in 2000 -- last year. Commissioner Suarez: Okay, they paid them late both years. Mr. May: Around May 20 of each year is when they pay their taxes. Commissioner Suarez: But they paid them late both years. Mr. May: Yeah, but they're not in default. There's no lien -- Commissioner Suarez: Okay. So they paid them late. Mr. May: -- on the property. There's no notice. Nobody's at jeopardy here. Commissioner Suarez: If they paid them -- Mr. May: They got a notice, and they paid the taxes, $800,000. They (UNINTELLIGIBLE) the check. City of Miami Page 52 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Commissioner Suarez: Okay. Mr. May: And now you're telling me they don't have the money? I don't know. Commissioner Suarez: Why were they late? Mr. May: I don't know. Commissioner Suarez: Okay. Thank you. Chair Hardemon: Commissioner Carollo. Commissioner Carollo: Thank you, Mr. Chairman. So I think my colleague is making a very compelling argument that, besides the permitting, there is actually yet another issue with Flagstone that most would think will find them in default. I've been patiently here listening to all sides, and I want to address some of the issues that were mentioned. And I have to admit, and I have to say it: You know, many times elected officials talk about vision, vision for the future, and vision could be looked at in many different aspects. One is, back in 2010, before we had additional hurdles that we may have to cross, is seeing a vision that this is not a good deal for the City of Miami; a vision that, if we continue, it's going to be more agony. And to be honest with you, simply put, like I said, it's not a good deal for the City of Miami. A vision of seeing 15 years of curing. In other words, deadlines being missed and curing, taxes not being paid and curing, and continuously curing and curing and curing. As a matter of fact, back in 2010, I asked the City Attorney what was the definition of "stringing us along." Honestly, I think we've seen it; took six years, but we've seen it. This is what's stringing us along, and appreciate the marine industry coming forward and saying how canceling this contract or defaulting Flagstone and trying to obtain the land back, would it impact the marine industry; that anything that would slow down the purpose will be viewed as hurting the marine industry. I respectfully ask, where has the marine industry been for the last 15 years when it has been slowed down; when what has been promised to the voters and to the residents have been met; what has been promised to the marine industry hasn't been met? I wish they would have come here in 2010 and really, you know, stuck up and put their voices on the record. However, I still appreciate that they came forward. You know, Mr. Fein came and mentioned very compelling argument with regards to continue the -- the continuance of a agreement, of a contract, even beyond the life of certain elected officials. So in other words, if my predecessors enter into agreement, just because new Commissioners come in, shouldn't just be able to break the contract. He has a strong point there. However, he has a strong point until one of the parties is found in default; and if one of the parties is found in default, then everything changes. So it's not necessarily that we didn't like what our predecessors did, and therefore, we're going to stop it and we're going to break the contract. No. Our predecessors came into an agreement. And if one of the parties did not honor that agreement and they're found in default, then, yes, a new Commissioner can step up and do the right thing. You know, Mr. May made some powerful arguments with regards to our professional staff. Let me be clear. I'm the first one that will tell you, we have very, very good staff. We have very good employees that put in a lot of hours, and they work very hard. At the same time, we have some of our professional staff that not necessarily work to the point that I just mentioned. For instance, our professional staff entered into some type of agreement with a developer that we were going to have a fire station built within that development at no cost to the City; except, they forgot to put it in writing: And everybody was under the impression that the City of Miami was going to obtain a fire station in a very needy area, an area that is really growing within Brickell, the West Brickell area. And unfortunately, our professional staff did not put that in writing, and it took us a very long time to be able to get that developer to do the right thing and put it in writing. So although I do believe we do have very good staff, let's be clear. There's been a lot of City of Miami Page 53 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 errors committed. As many of you know already, I'm a native Miamian. And from a very young age, I remember going to Watson Island and seeing the fishermen there selling their fish. We kicked those people out. We kicked them out. And for what? To wait. To wait. You know, we have a history, you know. How do you kick those people out in good faith, not allow our residents to use that land, and more importantly, move forward with arguments that Flagstone is in good standings? Maybe we should even give them a commendation, from what I heard. About the amount being paid, I think it was $6.3 million? $6.3 million in 15 years. You don't have to be a CPA (certified public accountant), like myself, or a finance wizard to know $6.3 million in 15 years? You know what? You should have put that on the ballot 15 years ago, and told our residents that in 15 years, you were going to get $6.3 million, except -- instead of what you put, that you said we were going to be receiving -- the City was going to be t's still a rip-off, but you know what? At least, when you mentioned with regards to the voters, you years. And within those 15 years, we're going to pay the City $6.3 million, and you That's outrageous. You know, and talking about the ballot language, I put an item in the ballot language back in 2015, and most people knew it was just because of Flagstone. Because just because you get approval 12 years before, 15 years before, 10 years before, doesn't mean that that approval lasts for an eternity. And that referendum passed by more than 10 points over what the original ballot language in 2001 passed. So the voters agreed that you have "X" amount of time to do what you're going to build; if not, you need to go back to the voters, because we really don't know right now if the voters' minds have changed, as they have many times. What if now, we don't need that type of development in the City of Miami? What about now, we should do a traffic study or have a traffic study? We should consider that. I mean, in all fairness, you know, Miami Beach -- although I get it -- maybe some of the people that were here do not live in the City of Miami; they live in Miami Beach. But you know what? They're our neighbors, and we should have good relationships with our neighbors. So we haven't had that opportunity to go back to the voters and see if maybe there's something else that we should obtain. You know, maybe a park, as opposed to what is there in the plans. Not to mention, back in 2001, I don't think -- talking about vision, there was that vision about a walkway or a bay walk, you know? Maybe that should be in the language. I haven't confirmed this, but it's my understanding that right now, even City residents still don't have access to the property. So if you want to go there, look at the scenery, look at the skyline, take pictures, you're not allowed. How could that be? You -- I mean, Mr. May does a very good job. He really does. I mean, when he comes here, and he sells it the way he does, but the bottom line is, it's been 15 years later, it hasn't been built, the City's been ripped off financially, and not even just financially. Where have our residents had the opportunity to enjoy that piece of land, one of the most valuable pieces of land in our City of Miami? So to say that we should issue a resolution that Flagstone's in good standing 15 years after the fact, I mean, listen, it's incredible how that could happen. I feel very strong that today we could right residents to see exactly what they would want. Chair Hardemon: Commissioner Gort. Commissioner Gort: Mr. Chairman, I'm going to be nice and short. I'm not a native, but I moved here in 1954. I lived in the same house for 53 years. And a lot of the new commerce and some of the old have been here for a long time need to understand, in the City of Miami, it's good to give a little history. We -- because of the expansions of many municipalities and the expansions of the Miami-Dade County, we suffered quite a bit, so don't talk to us about traffic. I mean, we all have traffic problems. I mean, some of our neighborhoods were ruined by I-95, because we needed people to communicate from another place to another; by 836, ruined Little Havana and some of the Shenandoah -- City of Miami Page 54 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 not Shenandoah -- I mean, Flagami and Grapeland. Then we had the 112, which ruined all of 36th Street. So we had suffered quite a bit of that, because of the expansion a municipality in the City of Miami. I do believe we had given plenty of time to these people to do the job, but I want you -- to remind you that we represent -- because you of Miami. So when we make a motion here, when we make an action here, we understand the groups that come here and they want to speak. Today, maybe we had a hundred people. That's .002 percent of our residents. So this is something that we need to know, okay? But it's important to know that we have suffered quite a bit in the City of Miami because of the traffic. Right now you got a new thing called, I understand, area and go through it. And this -- let's face it, this is going to end up in court. The court is going to make the suggestions, and they're going to come up with the answer. I just want to give a brief history on this, okay? Thank you. Chair Hardemon: Mr. Mayor. Mayor Tomás Regalado: Mr. Chairman, thank you. Mr. Vice Chair, Commissioners, thank you very much. I just want to follow up with Commissioner Gort's traffic. And, you know, a few days ago, there was a very tragic accident on Julia Tuttle. It was kind of the butterfly effect. We were told by the City of Miami Police Department and the Highway Patrol and Miami Beach Police that one motorcycle hit a scooter, killing the person. That person scooter killed a fisherman on the bridge, and the bridge was closed for several hours, in the early hours of the morning, and that created the biggest traffic gridlock that we have seen in years here; up to West Palm, I-95, 836, Biscayne Boulevard, so traffic is something that we need to deal with. Every day we get complaints about the Brickell Bridge and all that. So traffic is something that we need to work with the authority that has to deal with traffic. And I would just like to point out construction of McArthur Causeway, but -- so traffic is something that we need to (UNINTELLIGIBLE). I agree with Commissioner Carollo that, yes, the last Administration -- the past Administration did kicked out the fishermen. Actually, the fishermen did campaign for the referendum, because on the referendum ballot was fish market, and they were kicked out, and people lost their ways of living there. That was in 2003, I believe. And so, we're living with the sins of the past. My request to you is -- there are too many lawyers, too many hands, too many voices here, you know. I'm sure that whatever you vote, if you vote in favor of the resolution, the City Attorney will opine that there is a cure period, or any lawyer would opine that there is a cure period. So I'm sure that the people here will not want to leave with the idea that tomorrow we're going to have a park there. But what about an independent counsel? What about bringing someone for 30 days to see -- to look at everything and give a fresh idea? Because I don't think that they're going to move an inch, these people and these people. So my idea is that we have done that in the past. We're kind of arbitrate, but an n. I think that one of the greater things that had happened in this past years is the Charter Review that gave standing to the people on Charter matters. We're not discussing the Charter here; we may, but I haven't heard anything about the Charter here, but on Charter issues. And the second is that any project that is not done in four years go back to the voters. So that's a cure for the sins of the past. So my idea is to give you the possibility of an independent counsel that would have study with the City Attorney, with the Administration, with different part, and sit down and report back to you on 30 days. I mean, whatever you do, nothing is going to happen; only the headline tomorrow. And after that, nothing is going to happen for a short period of time. Thank you very much. Chair Hardemon: Commissioner Gort. City of Miami Page 55 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Commissioner Gort: Yeah. There's something I forgot to mention, which is very important. We have two cities in here. 2010 we almost went into bankrupt. We have reoccurring expenditure constantly, so we need reoccurring revenues. We also have -- -- being responsible to take over some of the procurement that has to be coming from the Federal Government or from the County Government. So I want you all to understand that, because it's very nice to talk about the parks and more parks. We have to maintain those parks, and we have to take care of those parks, but we also need revenues to pay our employees, to pay our safety public -- public safety people that do a lot of good services in here, so I want you to realize that when we talk about the -- going to do with this place. Commissioner Carollo: Mr. Chairman. Commissioner Gort: Call the question. Vice Chair Russell: All right, one last -- Commissioner Carollo: Just real quick, to add to that. Even if it was a park, I have -- I think some parks have proven that it would generate much more revenues than what Flagstone's paying us right now. Vice Chair Russell: Just a final comment, Mr. Chairman. I want to thank all of you for considering my motion today. I want to say that the voters of today are not the same voters of 2001. Their minds may have changed. The City has changed. Our needs have changed. And over this time, this partner, this developer has shown his true colors time and time again. If we do not vote to move forward with this motion today, I'm foreshadowing that we will be here again in this same scenario, and it may not even be exactly us; it may be the next Commission looking at, "Why weren't they able to finance it? Why did they miss another deadline? What bad faith situation are we in now?" I think we've seen all the flags we need to see, and I think we have all the information we need to make a decision. Thank you. Commissioner Suarez: Mr. Chair. Chair Hardemon: Yes. Commissioner Suarez: Thank you, Mr. Chair. I'd like to add a friendly amendment to the motion that there be a second event of breach, which is failing to meet the non- waived -- and that's a factual finding of this Commission -- provisions of Section 6.1.2 and 12.1.2 of the Agreement to Enter that supersede any and all contrary provisions from the lease. Vice Chair Russell: Agreed. Commissioner Carollo: Agreed. Chair Hardemon: Maybe I missed this. Did we ever get an opinion from our City Attorney's Office as to whether or not the City Attorney's Office considered this to a breach? Ms. Méndez: Thank you, Chairman. In light of all the information that has been presented today, there is a lot of questions still that remain unanswered. I do not have a determination of whether there is a breach or not. However, based on the contract, I believe that it would be in the best interest to send this to arbitration, because it basically says, "Any controversy, dispute, or breach arising out of this Amended and City of Miami Page 56 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Restated Ground Lease should go to arbitration." It is my advice to you to do so, and that is what I leave you with. Commissioner Suarez: Mr. Chair, I'll just say that the forum that this is decided is specified in the agreements, and so I think we should just leave it at that. Commissioner Gort: We're going to go to court. Chair Hardemon: I'm surprised that you don't have an opinion to give on the matter. I fully expected you to have some sort of opinion. I mean, each attorney on each opposing side, of course, has an opinion, which they're paid to come to. You could have been on that side making your arguments for them, if you were hired by Flagstone, as well as Mr. Fein could have been on this side making the arguments. That's what makes good lawyers, because -- Unidentified Speaker: (UNINTELLIGIBLE). Chair Hardemon: Sir -- And so, I say that to say, I've heard arguments from different attorneys, but the difference in this matter, and that I want all board members to always think about, is that when things come before this Commission, sometimes politics is king about politics between the board members; I'm talking about the politics that is inherent in coming to a vote. 60-some-odd percent voted to have this; some people voted in the negative. And from the moment it passed, there was always an attempt to keep this from occurring, but then there has been some - - it appears to be, missteps in the process of getting where we need to be, because clearly, 15, 16 years is a long time not to have a project completed. And what I was hoping to have is some true guidance about whether or not there was an actual breach of the contract that put us in the position to make this decision. And absent, you know, arguments -- I mean, I thought that the arguments made on the behalf of Flagstone were compelling in the sense that they presented these -- the lease agreement. They presented a lot of things that showed that they were indeed commencing construction. The argument about -- I mean -- not having a drywall. For instance, if you're doing construction, a drywall permit, and all the other types of permits that come within the master permitting process, I mean, that's fact. Mr. Bustamante -- I believe I pronounced it correctly -- his opinion on -- just his statement that any time someone commences, construction, there's never been someone that's had all of their permits approved at that time period. Sometimes, when people draft legislation -- and you have to blame the drafter -- they draft poorly. And every year, as in the Florida State -- with our Florida State Legislature, we're constantly rewriting statutes to make them more clear. Sometimes statutes are challenged because they are not clear. And so, you know, when I look at these agreements, I can see, going from one agreement to the next, that there'd be some clarification made, that there still be some mistakes made. I mean, when you look at the -- one of the agreements that we've been beholding to in the City of Miami and Miami-Dade County and the CRAs is the -- what is the agreement called? The -- Commissioner Suarez: (UNINTELLIGIBLE). Ms. Méndez: The global? Chair Hardemon: The Global Agreement, and that was probably one of the most poorly written documents that's ever existed between the tri-parties, right? And yet and still, the County still tries to fight the CRAs, and taking money away from the community of Overtown so that it can't provide the services that it's supposed to provide, based on that poor language, but, you know, that's their position. So -- and I thought that the Mayor's recom way or the other whether or not it is there. It is about getting the will of the people City of Miami Page 57 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 done, and I thought that the will of the people was to build this facility. Now, the question is, is there a breach? And is there a right to enforce this breach by doing what we're doing? And that's the part that I'm still struggling with, and I'll -- I mean, I would take an independent arbitrator's opinion about that, rather than the paid opinion of attorneys. Let them make the arguments to the judge. At least I know that the judge is going to -- at least he's supposed to make his decision based on the law and the facts. Commissioner Suarez: Mr. Chair. Chair Hardemon: And that's what I'm hoping I'm able to get -- Commissioner Suarez: Mr. Chair. Chair Hardemon: -- the law and the facts. And even when you get a lot of argument, you get a lot of opinion. I hadn't had a chance to really put my opinion on the matter, so I just wanted to put that on the record -- Commissioner Suarez: Of course. Chair Hardemon: -- is that I really do think that this should be about the law and the facts. And whoever the law and the facts side with, then that's where the decision should be. And that's the part, I think, making a decision up here as a board, where we may be in -- not in the best position, especially when this is something that, you know, our constituency of certain groups has pushed us to make, you know, a certain determination. Look, when you -- -- If you create a group, even a group like the Citizens for \[sic\] Causeway Chaos, you have an interest. The interest is to do a certain thing. That's why you all came together. And so that's considered, to me, a special interest. Your special interest is to ensure that this development does not occur and something else happens. It doesn't make you bad for what you do. The cause is noble. But there's still an interest that you take in the matter. And as I sit here as a voting member of this board, I don't have a special interest. My interest is to do what Commissioner Gort says: to represent the over half million residents of the City of Miami. And so, I understand that in media and in -- you know, we'll be damned if we do and damned if we don't. I understand that all five of us will vote, and one person may take the heat. I understand that, you know, that's just the way the bully pulpit works, right? There are groups, special interests or not; there are media, objective or not. There are all these people that try to push us to make a certain type of vote. You're a coward if you don't vote one way. You're a noble statesman if you vote another way. And so, you know, that's part of what makes these decisions very difficult. And there was a gentleman, particularly well-dressed, who was a president of a homeowners association, if you will, that was present. And he made a statement about, you know, him being in that seat, and how difficult it is in that seat, and so he doesn't envy us. We all chuckled. Commissioner Suarez: Condo association. Chair Hardemon: Yeah, a condo association. That's what it is. And we all chuckled. We chuckled because we know it to be true. I would have never thought that becoming a public official on a platform of doing better for my neighborhoods, getting more for them, which I know I have accomplished, and this board agrees that I have accomplished, could ever amount to the damnation of the type of -- the types of efforts that we take. I would have never thought that that is something that happens, but it happens, almost certainly. If I were a private citizen, and I gave away free puppies, I'd be treated better, but, you know -- Commissioner Suarez: Maybe not. City of Miami Page 58 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Chair Hardemon: -- it is -- Yeah, I know -- part of the penalty that we pay. So, you know, I just want to make a responsible decision, and that's what I hope that this board does, and that's why I thought that the Mayor's recommendation was good, because it put it in the hands of some people who won't be swayed or a person who won't be swayed by the court of public opinion, and I think that that's very, very important when you're deciding not only the fate of someone's freedom, but also the fate of civil matters, and that's why we have the court system. Commissioner Suarez: Mr. Chair. Chair Hardemon: Yes. Commissioner Suarez: Yeah. I mean, I'll just say this. We are a different body. We respond to our residents; that's why they're here, and that's why they get an opportunity to speak. I have no doubt that this will be before another forum, whether it's a judge or whether it's an arbitrator, whatever the case may be. And there will be time for all kinds of different discussion; settlement discussions -- you know, all kinds of things. I just think we are a political body. We have to respond to a variety of different factors. And you're right, you know; some people mischaracterize things that we say. I mean, that happens all the time. And that's why it's important to be careful in what we say and what we do, and -- but we ultimately have to make tough choices, and then we have to got two or three different decisions from judges scrutinizing our decisions, and that happens every week; we get these notice of decisions, you know. Most -- hopefully, most of the time they're positive, in favor of what this body has done. But it is difficult, and it is difficult to go through and sift through all these documents on a long weekend, when you want to be spending time with your family, but you have an obligation and a duty to the residents that are here to make sure that you do your job, and doesn't make it any easier, though. Commissioner Carollo: Mr. Chairman, to conclude, there's a couple points I do want to make. I know you've mentioned, again, with regards to what the voters -- by a large majority. I think it was 60-some percent voted on; you're right, but in that referendum, it stated that the City was going to be receiving $2 million a year; that hasn't happened. occurred is very different; not to mention in 2015, I took an item to the voters, and it passed by almost 80 percent, stipulating that after four years, if the developer doesn't do what they promised, and they don't obtain the necessary permits and so forth, does it have to go back to the voters? And by almost 80 percent, they sai know, I think, more than anything, we should respect the voters' wishes, and see that if someone's actually in default, which I believe -- at least I believe they are -- we should do the right thing and maybe take it back to the voters. With regard to the lawsuit, we faced that in 2010. They -- continuously, Mr. May, mentioned that there's going to be a lawsuit, and I don't want to say it was threats, but listen, it is what it is -- Vice Chair Russell: I move to call the question. Commissioner Carollo: -- you know, but -- Vice Chair Russell: Oh, I'm sorry. I thought you were finished. Commissioner Suarez: Yeah. Commissioner Carollo: No. I'll yield. Let's call the question. City of Miami Page 59 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Vice Chair Russell: I move to call the question. Commissioner Suarez: Second. Mr. May: Can I make -- could I ask a question, Mr. Chairman? Chair Hardemon: The move to call the question has been seconded. Is there any objection to the calling of the question? If there's no objection -- Mr. May: Mr. Chairman. Chair Hardemon: -- to the calling of -- question, then the question shall be called. Roll call vote. Mr. Hannon: Roll call on item SP.1. Commissioner -- Ms. Méndez: Commissioners, just -- is it as amended -- Commissioner Suarez: Amended. Ms. Méndez: -- to go to -- Commissioner Suarez: Yeah, yeah. Ms. Méndez: -- arbitration? Okay. Thank you so much. Mr. May: What is (UNINTELLIGIBLE)? Vice Chair Russell: No, no, no. Unidentified Speaker: Wait a minute. Unidentified Speaker: No, no, no Commissioner Carollo: Hold on. As amended -- the only amendment that I know of is that Commissioner Suarez asked for six -- Commissioner Suarez: Yeah. Commissioner Carollo: -- an additional default. Commissioner Suarez: Yes. that's being called? Chair Hardemon: Mr. Clerk, can you repeat the -- Vice Chair Russell: It's as written. Commissioner Suarez: I think there's two. Chair Hardemon: -- motion? Can you identify what the motion is for the record? Mr. Hannon: The motion is simply to pass SP.1 with the amendments proffered by Commissioner Suarez. City of Miami Page 60 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 Vice Chair Russell: As written. Chair Hardemon: And so the amendments proffered by Commissioner Suarez were -- there were some special conditions, I think. Commissioner Suarez: No. It was that there was a second event of default, which was - - I mean, it's on the record. Commissioner Carollo: You stated it on the record. I don't think you need to state it again. Vice Chair Russell: We're good. Commissioner Suarez: (UNINTELLIGIBLE). Commissioner Carollo: I think we're clear. Chair Hardemon: Yeah, make sure our City Attorney's on the same page. Mr. May: Mr. Chairman, there is an option that hasn't been discussed -- Vice Chair Russell: Wow. Mr. May: -- which is the City does not have to find Flagstone in default, and I haven't heard anybody on the dais say that -- other than Commissioner Russell -- Flagstone is in default with regard to commencement of construction or another breach. I haven't heard specifically what that breach is, so -- but the City does have the right to demand arbitration on any dispute or controversy under the agreement, and can send it to arbitration, which is prescribed and it's quick, and it would be a lot faster and a lot more expeditious -- Chair Hardemon: Mr. May? Mr. May: -- and efficient than going through what we may go through. Chair Hardemon: Mr. May, I think that argument fell on deaf ears, and so what we did was -- there was a motion; there was a second to call the question. Commissioner Suarez: I think that's where we'll end up. Chair Hardemon: I asked was there an objection to the calling of the question. So for procedural order, that is the way we go about doing it. Just because someone calls the question doesn't mean the question is called. If there's still some unreadiness from the body, then that body's allowed to express that unreadiness, and the question shall not be e about calling the question; we either call it or we do not. And so, if there's an objection, it is not called. There was no objection. Madam City Attorney interrupted, because she needed some clarification upon the motion. I'm assuming the motion has been clarified, so now we'll move to the vote. Mr. Hannon: Roll call on -- Ms. Méndez: Yes. Mr. Hannon: -- item SP.1. Commissioner Gort? City of Miami Page 61 Printed on 7/21/2017 City Commission Meeting Minutes May 30, 2017 -- I stated before, this is going to go to court, and all these people have been suing for six and four times. Maybe we get it over with on one court hearing and see what happens. Yes. Mr. Hannon: Commissioner Suarez? Commissioner Suarez: Yes. Mr. Hannon: Commissioner Carollo? Commissioner Carollo: Yes. Mr. Hannon: Vice Chair Russell? Vice Chair Russell: Yes. Mr. Hannon: Chair Hardemon? Chair Hardemon: For. Mr. Hannon: The resolution passes, 5-0, as amended. Chair Hardemon: Meeting adjourned. Commissioner Carollo: Mr. Chairman, real quick, are we doing the executive session? Daniel J. Alfonso (City Manager): I would request that we move it to June 8, because we're not going to have all the Commissioners here. END OF SPECIAL MEETING ADJOURNMENT The meeting adjourned at 2:09 p.m. City of Miami Page 62 Printed on 7/21/2017