2010-27533 Reso 2010 -27533
RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING AN AMENDMENT NO. 1 TO
THAT CERTAIN LEASE AGREEMENT BY AND BETWEEN THE CITY AND
MIAMI BEACH FILM SOCIETY, INC., DATED DECEMBER 9, 2009, FOR
THE LEASE OF APPROXIMATELY 2,523 SQUARE FEET OF CITY -
OWNED PROPERTY, LOCATED AT 1130 WASHINGTON AVENUE, 1sT
FLOOR SOUTH, MIAMI BEACH, FLORIDA; SAID AMENDMENT
PROVIDING FOR AN ADDITIONAL FIVE (5) MONTH RENT ABATEMENT;
FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE
THE AMENDMENT
WHEREAS, on December 9, 2009, the Mayor and City Commission adopted
Resolution No. 2009- 27282, approving a Lease Agreement between the City of Miami
Beach (City) and the Miami Beach Film Society, Inc. (Cinematheque) for use of
approximately 2,523 square feet of City -owned property, located at 1130 Washington
Avenue, 1 Floor South, Miami Beach, Florida; and
WHEREAS, the approved Lease Agreement was for an initial term of three years,
commencing on March 1, 2010, with two additional three year renewal terms at the City's
sole discretion; and
WHEREAS, the Lease Agreement provides the Cinematheque with a three month
rent abatement plus the application of half of the security deposit payment (equal to one
months rent) towards the first month's rent after completion of the improvements to the
Demised Premises; and
WHEREAS, the Cinematheque requested an amendment to its current Lease
Agreement to provide for an additional five month rent abatement period due to unforeseen
permitting delays which have resulted in the Cinematheque's inability to complete the
improvements within the time frame originally anticipated, a fifty percent increase in build -
out costs, and its inability to generate revenues; and
WHEREAS, on September 15, 2010, the Mayor and City Commission referred the
Cinematheque's request to the Finance and Citywide Projects Committee (F &CPC) for
discussion; and
WHEREAS, at its October 14, 2010 meeting, the F &CPC recommended providing
the Cinematheque with an additional five month rent abatement and also recommended
that the Lease Agreement be amended to reflect said abatement.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby approve an Amendment No. 1 to that certain Lease Agreement by and
between the City and Miami Beach Film Society, Inc., dated December 9, 2009, for the
lease of approximately 2,523 square feet of City -owned property, located at 1130
Washington Avenue, 1 Floor South, Miami Beach, Florida; said Amendment providing for
an additional five (5) month rent abatement; further authorizing the Mayor and City Clerk to
execute the Amendment.
PASSED AND ADOPTED THIS 27 day of October, 2010.
Attest:
) CIUA
is..
Robert Parcher, CITY CLERK atti Herre a = ower, MAYOR
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APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
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•
COMMISSION ITEM SUMMARY
Condensed Title:
Resolution approving and authorizing the Mayor and City Clerk to execute Amendment No. 1 to the
Lease Agreement between the City and Miami Beach Film Society, Inc., for use of 2,523 SF of City -
owned property located at 1130 Washington Avenue, 1 Floor South; said Amendment providing for
an additional five (5) month rent abatement.
Key Intended Outcome Supported:
Increase resident satisfaction with the level of services and facilities.
Supporting Data (Surveys, Environmental Scan, etc.):
Approximately 40% of retail businesses surveyed, rank Miami Beach as one of the best places to do
business and 61% of the same group would recommend Miami Beach as a place to do business.
Issue:
Shall the City Commission approve Amendment No. 1 to the Lease Agreement?
Item Summary /Recommendation:
On December 9, 2009, the Mayor and City Commission adopted Resolution No. 2009 - 27282,
approving a Lease Agreement between the City of Miami Beach (City) and Miami Beach Film Society,
Inc. (Cinematheque) for use of approximately 2,523 square feet of City -owned property. The approved
Lease Agreement was for an initial term of three years, commencing on March 1, 2010, with two
additional three year renewal terms at the City's sole discretion.
The Lease Agreement provided the Cinematheque with a three month rent abatement plus the
application of half of the security deposit payment (equal to one months rent) towards the first month's
rent after completion of the improvements to the Demised Premises. Rent commencement date was
June 1, 2010 and the Cinematheque has made prompt rental payments since that time.
The Cinematheque requested an amendment to its current Lease Agreement to provide for an
additional five month rent abatement period due to unforeseen permitting delays which have resulted
in the Cinematheque's inability to complete the improvements within the time frame originally
anticipated, a fifty percent increase in build -out costs, and its inability to generate revenues. While the
facility in under construction (their location at Espanola Way closed at the beginning of summer).
At its October 14, 2010 meeting, the Finance & Citywide Projects Committee discussed the
Cinematheque's request and recommended approving an additional five month rent abatement, and
also recommended that the Lease Agreement be amended to reflect said abatement.
Advisory Board Recommendation:
Finance & Citywide Protects Committee: October 14, 2010
Financial Information:
Source of Funds: n/a Amount Account
1 n/a
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Anna Parekh, extension 7193
Sign -Offs:
Department Director Assista A City Manager City Ma = • er
AP HM -I , / , L t / ' / G _ , L , 1 1 1 1 •
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MIAMIBEACH AGENDA ITEM G 7N
DATE / -/0
A I B EA H
M M C
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Ma • r M - tti Herrera Bower a embers of the City Commission
, 4 _ ♦ l
FROM: Jor - M. Gonzalez, City Man - • r
DATE: October 27, 2010
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, APPROVING AN AMENDMENT NO. 1 TO THAT CERTAIN LEASE
AGREEMENT BY AND BETWEEN THE CITY AND MIAMI BEACH FILM SOCIETY, INC.,
DATED DECEMBER 9, 2009, FOR THE LEASE OF APPROXIMATELY2,523 SQUARE
FEET OF CITY -OWNED PROPERTY, LOCATED AT 1130 WASHINGTON AVENUE,1
FLOOR SOUTH, MIAMI BEACH, FLORIDA; SAID AMENDMENT PROVIDING FOR AN
ADDITIONAL FIVE (5) MONTH RENT ABATEMENT; FURTHER AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE THE AMENDMENT
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
KEY INTENDED OUTCOMES SUPPORTED
Increase resident satisfaction with the level of services and facilities.
BACKGROUND
On September 3, 2009, the Finance and Citywide Prgects Committee considered, approved and
forwarded to the full Commission for consideration a proposed lease agreement between the City of
Miami Beach (City) and the Miami Beach Film Society, Inc., d /b /a Miami Beach Cinematheque
(Cinematheque), for use of approximately 2,523 square feet of City -owned property (the Demised
Premises), located at 1130 Washington Avenue, 1 Floor South, Miami Beach, Florida. The
Committee recommended a $20 per square foot rent, an amount lower than market rents, but
recommended because of the non - profit nature of the organization, as well as the type of activation
to the space and area that this business will provide. The Cinematheque's proposed use requires
significant build -out to meet their operational needs.
After much discussion regarding the lease, the Committee members recommended a lease
commencement date of March 1, 2010 to allow the Cinematheque sufficient time to prepare build -
out plans to submit for permitting (at least five months from the date of lease approval at
Committee). Recognizing that the Cinematheque would then require build out time, it was also
recommended by staff that a two -month rent abatement be provided. However, the Committee
recommended an additional month of tenant improvement credit in lieu of the City assuming the
costs and responsibility of certain demolition in the space; theCinematheque was agreeable with
assuming demolition in exchange for the additional month tenant improvement credit. As such, the
proposed rent commencement was June 1, 2010. At that time, the Cinematheque's estimated
construction costs were $150,000.
On December 9, 2009, the Mayor and City Commission adopted Resolution No. 2009 - 27282,
approving on second reading the Lease Agreement between the City and the Cinematheque. As per
Commission Memorandum
Miami Beach Film Society, Inc.
October 27, 2010
Page2of3
the Commission's approval of the lease, the Cinematheque provided half of the required security
deposit subsequent to lease execution, ($4,205, equal to one months rent) and the second half of
the security deposit (one month's rent) on June 1, 2010. However, the Commission's approval
included allowing the second half of the security deposit (one month's rent) to be applied toward rent
after the completion of the tenant improvements, with the expectation that those improvements
would be completed by the rent commencement date of June 1 - or nine months from Committee
approval (six months from lease approval).
BACKGROUND
The Cinematheque has been paying its monthly rent ($4,205) since June 1, 2010 as required
pursuant to their Lease (June, July, August, September and October). However, the Cinematheque
has not completed its build -out as originally anticipated and the Cinematheque has advised staff that
the projected build -out costs (interior demolition and reconstruction of the Demised Premises) have
doubled to approximately $300,000. The permit plans and application were submitted to the City's
Building Department on April 23, 2010 and the Cinematheque advised the City that due to
unforeseen permitting delays, a building permit was not obtained untl August 17, 2010.
In Tight of the delay in completing the build -out, the estimated costs of the build -out (not yet
confirmed by the City) and the inability to operate in the leased space to generate revenue (originally
anticipated by the Cinematheque to have begun by August 1, 2010, but now anticipated to begin
December 1, 2010), the Cinematheque approached City staff about the possibility of obtaining an
additional rent abatement or tenant improvement credit equivalent to five (5) months rent, as well as
a credit of half of the security deposit.
While the Finance Committee discussed the issue thoroughly prior to approval of the lease and
recommended lease commencement and rent commencement dates that they deemed would be
sufficient to allow for the Cinematheque to obtain the necessary permits and complete construction
in order to open and generate revenue (a total of nine months from Committee approval to the rent
commencement date; six months from Commission approval to rent commencement date), any
additional rent relief for the tenant requires a lease amendment that must be approved by the City
Commission.
On September 15, 2010 the Mayor and City Commission approved a referral to the Finance and
Citywide , Projects Committee a discussion of the Cinematheque's request to consider an
amendment to their lease to provide for additional rent abatement,
ANALYSIS
The total value of the Cinematheque's request for an additional five month rent abatement and
credit of half of the security deposit paid (equivalent to one month's rent) is $21,205 for the
additional rent abatement, and a credit of $4,205 to be applied to the first rent payment (total of
$25,230); this is in addition to the value of the three month rent abatement of $12,615 already
provided for in the lease. If the additional rent abatement is approved, commencing in November
2010 and including the application of the credit of one month's rent; theCinematheque would not
recommence paying rent until May 2011.
Staff has yet to review in detail the revised build -out costs. While the Cinematheque has been
paying their required rent since the rent commencement date in spite of no revenues being
generated at this location, as previously noted and as discussed at length by the Committee prior to
recommendation for approval more than a year ago, the per- square -foot rent charged to the
Cinematheque is below market rent for comparable space. As you are aware, rent abatements and
tenant improvement credits have been provided to other tenants; however, those tenants have been
charged market or near - market competitive per - square -foot rents.
Commission Memorandum
Miami Beach Film Society, Inc.
October 27, 2010
Page3of3
In consideration of this information, the Administration requested that the Finance and Citywide
Projects Committee (F &CPC) reviewthe Cinematheque's request.
CONCLUSION
At its October 14, 2010 meeting, the F &CPC recommended providing the Cinematheque with an
additional five month rent abatement a credit of half of the security deposit (one month's rent) and
also recommended that the Lease Agreement be amended to reflect said abatement. The
proposed amendment is submitted for the Mayor and Commission's consideration.
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