LTC 326-2019 LEASE AGREEMENT BETWEEN THE CITY AND NORTH BEACH YARD, LLC M ! AMIBFACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 331 39,www.miamibeachfl.gov
OFFICE OF THE CITY MANAGER
326-2019 LETTER TO COMMISSION
TO: Mayor Dan Gelber and Members of e City ommission
FROM: Jimmy L. Morales, City Manager
DATE: June 6, 2019
SUBJECT: LEASE AGREEMENT BETWEEN THE ITY AND NORTH BEACH YARD, LLC
The purpose of this Letter to the Commission (LTC) is to update the Mayor and City Commission
regarding the status of the North Beach Yard (NBY) project. Several Commissioners had inquired
as to the status, I felt it proper to share the information with all of you.
At its July 26, 2017 meeting, the Mayor and City Commission adopted Resolution No. 2017-29942
approving a new lease agreement between the City and North Beach Yard, LLC (Tenant),
involving the use of the City-owned property located at 8100-8140 Collins Avenue. The lease
was subsequently executed by the parties on November 20, 2017. The leased premises consists
of 52,500 square feet of land, including a 2,500 square foot building, for use as a food, beverage
and entertainment pavilion, including retail and other vendors, and for cultural/community
programming and entertainment offerings.
Since execution of the lease, the City has proceeded in good faith to facilitate the design and
development of the landlord improvements, as contained in subsection 5.1(b) of the lease. In that
regard, as related to the renovation of the 2,500 square foot building, the City's architect has
completed design drawings to 90% at a cost of$33,195 to the City. In December 2018, the City
directed our architect not to proceed to 100% completion until the tenant meets its obligations
under the lease.
The project's successful launch requires the tenant to provide specific information and obtain
certain approvals from the City, in its proprietary capacity, prior to submission for a building permit.
The City Commission, in its regulatory capacity, approved tenant's concept plans on May 16,
2018; however, at this time we are pending tenant's submission of the schematic drawings and
construction budget, as required under Subsection 5.2(c) of the Lease. Also, we would like to
review the status of the design & development in accordance with the concept plans approved by
the City Commission.
Additionally, as contained in section 5.2(n) of the lease, no later than 365 days following the
effective date (i.e., November 20, 2018), tenant was required to provide the City with written
evidence, reasonably satisfactory to the City, of the existence of: (1) equipment leases/financing
for container structures; (2) secured financing for tenant's work; (3) the availability of liquid assets,
(4) a general contractor contract; and (5) a performance bond and payment bond covering the full
Letter to Commission—North Beach Yard
June 6, 2019
Page 2 of 2
amount of tenant's work (in the amount of $1,750,000). At this time, tenant has not provided
evidence of fulfilling these requirements to the City.
Lastly, pursuant to section 2.7 of the lease, a security deposit or letter of credit in the amount of
$17,914 was due upon the lease effective date (November 20, 2017). At this time, tenant has not
provided this amount to the City.
Last week staff contacted Della Heiman, owner of North Beach Yard, LLC to discuss the status
of the project and the outstanding items. City staff remains supportive of the project concept and
would like to see the project move forward if possible. Ms. Heiman advised staff that she was out
of the country until July and that she would like to meet with the City upon her return. Our intention
is to meet with Ms. Heiman upon her return and report to the City Commission by LTC promptly
thereafter.
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