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HomeMy WebLinkAboutAmendment 2 to the Concession Agreement between the CMB an Penrod Brothers, Inc.2c 26-342 8$ SECOND AMENDMENT TO THE CONCESSION AGREEMENT BETWEEN THE CITY OF MIAMI BEACH, FLORIDA AND PENROD BROTHERS, INC. This Second Amendment (-Amendment") to the Concession Agreement dated February 25, 2004 by and between the City of Miami Beach, Florida, a municipal corporation organized and existing under the laws of the State of Florida, ("City"), and Penrod Brothers, Inc., a Florida corporation ("Penrod" or 'Concessionaire', and together with the City, "the parties'), for that portion of Pier Park seaward of the footprint of the Penrod's Restaurant located at One Ocean Drive, Miami Beach, and the beaches seaward thereof (the "Concession Area") is entered into this f w day of TO qG . 20�. RECITALS WHEREAS, on October 2, 1985, the Mayor and City Commission adopted Resolution No. 85-18223, approving a Lease Agreement between the City and Penrod for the development, construction, management and operation of a restaurant facility at the property located at One Ocean Drive (as amended by the First Amendment, Second Amendment and Third Amendment. the "Lease Agreement"): and WHEREAS, on February 25, 2004. the Mayor and City Commission adopted Resolution No. 2004-25506, approving a Concession Agreement between the City and Penrod for the operation of a concession in the Concession Area consisting of the rental of beach equipment, water recreation equipment and food and beverage service (the "Concession Agreement'), and WHEREAS, disputes have arisen between the parties relating to the Property; the Lease Agreement; the Concession Agreement; City Commission Resolutions 2023- 32586, 2023-32612, and 2023-32825; City procurement activity and a City -issued request for proposals RFP 2023-479-KB (the "RFP"); a contract between City and Boucher Brothers Pier Park, LLC ("Boucher") dated October 20, 2023 (the "Contract"); and applications by Boucher and City for land use approvals, variances and permits; including as described in pleadings and papers in lawsuits at Case Nos. 2023-016657-CA-01 (Fla. ttth Cir. Civ.); 2023-56-AP-01 (Fla. 11" Cir. App.); 2023-CV-23362 (S.D. Fla.); 2025 13415 (11th Cir.), which suits remain pending (the "Litigation") (together, the "Disputes"); and WHEREAS, on March 28, 2026, pursuant to Fla. R. Civ. P. 1.720(d), the parties agreed to the material terms of a settlement of the Disputes reflected in a term sheet executed by the parties (the "Term Sheet'), which will be documented in a settlement agreement ("Settlement Agreement"), an amendment to the Lease (the "Fifth and Final Amendment"), an amendment to the Concession Agreement (the "Second Amendment to Concession Agreement's and an amendmentto the Contract (collectively, the "Settlement Documents") to be presented to the City Commission for its approval; and WHEREAS, the terms of the Settlement Agreement contemplate a 15- month extension of the term of the Lease Agreement and the Concession Agreement through August 6. 2027:and WHEREAS, in order to facilitate the preparation of the Settlement Agreement and the proposed fifteen -month extension, the City Commission, at its April 22, 2026 meeting, approved a short-term extension pursuant to Resolution No. 2026-34212, thereby extending both the Lease and the Concession Agreement through August 31, 2026. WHEREAS, the City Administration has reviewed the proposed Settlement Documents and determined that the settlement, including the Lease Amendment and Concession Amendment, is in the best interest of the City, as it resolves pending litigation, reduces financial and operational uncertainty, and provides continuity of operations at the Premises; and NOW THEREFORE, in consideration of the mutual promises and conditions contained herein, and other good and valuable considerations, the sufficiency of which is hereby acknowledged, the City and Concessionaire hereby agree to amend the Concession Agreement as follows'. ABOVE RECITALS. The above recitals are true and correct and are incorporated as part of this Amendment. Capitalized terms used herein and not otherwise defined shall have the same meaning as ascribed to them in the Concession Agreement. The City and Concessionaire have simultaneously executed an alternative form of this Amendment (the "Aftemative Second Amendment to Concession Agreement"). If by or before September 30, 2026, the Mayor and City Commission of the City of Miami Beach, Florida has not approved an amendment to that certain Concession Agreement for Management and Operation of a High -End Beach Establishment dated October 20, 2023 by and between the Lessor and Boucher Brother Pier Park, LLC ("Boucher") as cont mplated by that certain Settlement Agreement ("Settlement Agreement') dated b V , 2026 by and among the Lessee, the Lessor and Boucher resulting in the voidance of the Settlement Agreement, then this Amendment shall be null and void ab initio and the Alternative Second Amendment to Concession Agreement shall be immediately effective. 2. MODIFICATIONS. The Concession Agreement is hereby immediately amended to extend the Term and all rights and obligations of the parties thereunder through August 6, 2027. 3. RATIFICATION. Except as amended herein, all other terms and conditions of the Agreement shall remain unchanged and in full face and effect. In the event there is a conflict between the provisions of this Amendment and the Agreement, the provisions of this Amendment shall govern. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their appropriate officials, as of the date first entered above. FOR LANDLORD: CITY OF MIAMI BEACH ATTEST: By: a Granado C'�E Clark ric 7. Carpen r, City Manager REGIS BAHBOU . e JUN - 2 2020 iV Eacs , ?' Date OAT j FOR CONCESSIONAIRE: Witnesses: PENROD BROTHERS INC. By: J"w.-fi"rw Print Name: jiblme Harris Print Name: Maria Fehretdinov r President Lucia Penrod Print Name APPROVED AS TO FORM &LANGUAGE & FOR EXECUTION �I%lo CiyA� Dote Exhibit 3 Mediation Settlement Binding Term Sheet Daaslan Em w In eD08T/PBC0a 76RA 4064AVSRFAa Penrod Bros. Inc. v. City of Miami Beach, Boucher Bros. Miami Beach, LLC Case No. 2023-016657-CA-01 Mediation Settlement Binding Tern Sheet • Penrod will immediately withdraw/terminate all support of any kind for any opposition; and end any joint/common-interest relationship and all assistance with any objector/opposition; in respect of RFP, Property, and all related subject matter. • Boucher and the City to pay Penrod $3 million (the `Settlement Payment") on the earlier of September 30, 2026 or final approval of all Project Approvals (as that term is defined under the Boucher Contract). The Settlement Payment is to be paid as follows; the City to pay $1.5 million and Boucher to pay $1.5 million. Upon payment, Penrod will dismiss with prejudice all claims, causes of actions, suits, appeals, etc.; withdrew with prejudice all objections, protests, or other administrative actions. • City and Penrod extend Penrod's lease and concession agreement by 15 months (to end August 6, 2027), on the same rent/payment, operational, and other terms. Penrod will continue operations in compliance with lease and all applicable laws, including without limitation all City ordinances. Penrod may sub -lease or sub -contract portions of the property for operations consistent with current uses and hours operation. All three parties agree to non-interference with Penrod's contracts and operations. Penrod will allow specific boring tests by Boucher provided non-interference with Penrod's operations. • Standard mutual releases. A11 parties pay their own attorneys' fees, etc. • All settlement terms herein are contingent upon City final approval of all agreed amendments to the Boucher Contract as listed in the Binding Settlement Term Sheet between Boucher and the City attached hereto as Exhibit A. • At the end of Penrod's lease and concession agreement, Penrod shall deliver the City property at One Ocean Drive back to the City in no worse condition than exists as of the date of the Settlement Agreement consistent with Section 20 of Penrod's lease with the City. • Parties willjointly and under seal seek stay of litigation to allow for Planning Board review, and Commission approval, documentation, and execution. • Pursuant to Rule 1.720(d), the City's signature solely signifies that it will recommend the above terms to the Mayor and City Commission for final settlement approval. This reflects the parties' material terms of settlement. Doms* EnvbW 0: BC0.S1r35CD 728-0M6C9F SRFA9 PENROD BROTHERS INC. BOUCHER BROTHERS MIAMI BEACH, I.r cab4meeY oR.eyn.q by Lucia Penrod, CEO, Co -Founder, Owner by Steven Boucher, Co -Founder, Principal CITY OF MIAMI BEACH �a aer: ,t,.co �oPico �.wce,ecssrwa _ _ _ by Ricardo Dopico, City Attorney Y"iW]hOrl Penrod Bros. Inc v City of diami Beach Boucher Brost Miami Beach, LLC Case No. 2021-016657-CA-01 • As part of tlse settlement agreement in this matter, the Citj and Boucher agree to amend Boucher Ems. Miami Beach LLC's existing concession ag ment es follows: o Section 1.1 to he amended as follows: This Agree m shall be effective as of the Effective Date, but the term hereof shall not to ence until the earlier of: (a) August I, 2029 (the "Outside Commencement Dat '� subject to extension due to Unavoidable Delays (as hereafter defined) occurrin from and after the date of the settlement agreement and (b) the date on which any of the Concession Operations (as hereinafter defined) have been issued a certi cafe of use or certificate of completion, as applicable, and are fully open to the ublic for business (the earlier of such dates, the "Commencement Date'). For the avoidance of doubt, the foregoing 2-year extension of the Outside Com encement Date accounts for claims for Unavoidable Delays made prior to the da hereof by Boucher. a Addition of one extension option for five (5) years o long as Boucher is in good standing o Recommendation to Mayor and City Commissio to approve demolition of currently existing building on the property at One O n Drive o Should the City exercise the 5 year option, in Yea 10 them will be rent reset to arrive at the new minimum guaranteed annual rent f years 10-15. Percentage rent for years 10-15 shall stay the same. o Pursuant to Rule 1.720(d), the City's signature solely signifies that it will recommend the above terms to the Mayor and City C mmission for final settlement approval. BOUCHER BRC THERE MIAMI BEACH, LLC by Steven Bouch , Co -Founder, Principal CITY OF MIAMI BEACH RIM by Ricardo Dopico, City Attorney Composite Exhibit 4 Alternative Penrod Lease and Concession Agreement Amendments FIFTH AMENDMENT TO THE LEASE AGREEMENT BETWEEN THE CITY OF MIAMI BEACH, FLORIDA AND PENROD BROTHERS, INC. (ALTERNATIVE FORM] This Fifth Amendment ("Amendment") to the Lease Agreement dated November 7, 1985 by and between the City of Miami Beach, Florida, a municipal corporation organized and existing under the laws of the State of Florida, ("Lessor' or 'City"), and Penrod Brothers, Inc., a Florida corporation ("Lessee" or "Penrod", and together with the City, "the parties"), for the property located at One Ocean Drive, Miami Beach, FL ("Premises') is entered into this 30" day of September 2026. RECITALS WHEREAS, on October 2, 1985. the Mayor and City Commission adopted Resolution No. 85-18223, approving a Lease Agreement between the City and Penrod for the development, construction, management and operation of a restaurant facility at the Premises (as amended by the First Amendment, Second Amendment and Third Amendment, the "Lease Agreement); and WHEREAS, on March 2, 1988. the Mayor and City Commission adopted Resolution No. 88-19178, approving the First Amendment to the Lease Agreement, thereby amending the building footprint and appropriating funds for construction of a portion of the Pier Park parking area; and WHEREAS, on April 6, 1988, the Mayor and City Commission adopted Resolution No, 88-19211, approving the Second Amendment to the Lease Agreement, thereby revising the site plan and legal description, and WHEREAS, on February 25, 2004, the Mayor and City Commission adopted Resolution No. 20D4-25507, approving the Third Amendment to the Lease Agreement to coned a scrivener's error in the exhibits to the Lease Agreement, to modify certain provisions relating to Percentage Rent. and to enable Penrod to terminate the Concession Agreement dated February 25, 2004 between the parties (the "Concession Agreement") in the event of an economic downturn; and WHEREAS, disputes have arisen between the parties relating to the Property; the Lease Agreement; the Concession Agreement, City Commission Resolutions 2023- 32586, 2023-32612, and 2023-32825, City procurement activity and a City -issued request for proposals RFP 2023-479-KB (the "RFP"); a contract between City and Boucher Brothers Pier Park, LLC CBoucher) dated October 20, 2023 (the "Boucher Contract; and applications by Boucher and City for land use approvals, variances and permits; including as described in pleadings and papers in lawsuits at Case Nos. 2023-016657- CA-01 (Fla. 11th Cir. Civ.); 2023-56-AP-01 (Fla. filth Cir. App.); 2023-CV-23362 (SO. Fla.); 2025-13415 If 1th Cir.), which suits remain pending (the "Litigation") (together, the "Disputes'); and WHEREAS, on March 26, 2026, pursuant to Fla. R. Civ. P. 1.720(d), the parties agreed to the material terms of a settlement of the Disputes reflected in a term sheet executed by the parties (the "Term Sheet'), which have been documented in a settlement agreement ('Settlement Agreement"), an amendment to the Lease (the "Fifth Amendment to the Lease'), and an amendment to the Concession Agreement (the "Second Amendment to Concession Agreement'). and an amendment to the Boucher Contract (collectively, the "Settlement Documents") presented to the City Commission for its approval, and WHEREAS. the terms of the Settlement Agreement contemplate a 16- month extension of the term of the Lease Agreement and the Concession Agreement through August 6, 2027: and WHEREAS, in order to facilitate the preparation of the Settlement Agreement and the proposed fifteen -month extension, the City Commission, at its April 22, 2026 meeting, approved a short-term extension pursuant to Resolution No. 2026-34212, thereby extending both the Lease and the Concession Agreement through August 31, 2026. WHEREAS, the City Administration has reviewed the proposed Settlement Documents and determined that the settlement, including the Lease Amendment and Concession Amendment, is in the best interest of the City, as it resolves pending litigation, reduces financial and operational uncertainty, and provides continuity of operations at the Premises; and NOW THEREFORE, in consideration of the mutual promises and conditions contained herein, and other good and valuable considerations, the sufficiency of which is hereby acknowledged, the City and Lessee hereby agree to amend the Lease Agreement as follows: 1. ABOVE RECITALS. The above recitals are true and correct and are incorporated as part of this Amendment. Capitalized terms used herein and not otherwise defined shall have the same meaning as ascribed to them in the Lease Agreement. 2. MODIFICATIONS. The Lease Agreement is hereby immediately amended to extend the Term and all rights and obligations of the parties thereunder through January 10, 2027. The Lessor and Lessee have simultaneously executed a Fifth Amendment to the Lease (the "Original Fifth Amendment to Lease") as contemplated b the terms of that certain Settlement Agreement ("Settlement Agreement) dateZO, 2026 by and among the Lessee, the Lessor and Boucher &others Pier Park, LLC ("Boucher'). This alternative version of the Fifth Amendment shall only become effective if by or before September 30, 2026. the Mayor and City Commission of the City of Miami Beach, Florida has not approved an amendment to that certain Concession Agreement for Management and Operation of a High -End Beach Establishment dated October 20, 2023 by and between the Lessor and Boucher resulting in the voiding of the Settlement Agreement and the Original Fifth Amendment to Lease, as which time this alternative Fifth Amendment to Lease shall be immediately effective. In consideration of the City's entering into this alternative Fifth Amendment to Lease despite the voidance of the Settlement Agreement, Penrod agrees to not pursue injunctive relief in the Litigation to permit Penrod to remain on the Property after January 10. 2027 and that it will vacate the Property on or before January 10, 2027. 3. RATIFICATION. Except as amended herein, all other terms and conditions of the Agreement shall remain unchanged and in full force and effect. In the event there is a conflict between the provisions of this Amendment and the Agreement, the provisions of this Amendment shall govern. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their appropriate officials, as of the date first entered above. FOR LANDLORD: CITY OF MI BEACH ATTEST: By: • 02nado, City Clerk Steven Melner, REGIS BARBOU .' ems• JUN - 2 2026 •. Date `:INIOAP aAAiEO! E i v FOR TENANT:REgye;,. Witnesses: PENROD BROTHERS INC. J"M&Fterri,r1--- Print Name. Javme Harris President Wma X. Lucia Penrod Print Name: Mana Fahretdinov Print Name APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION S Z9�?k Cm Attom" Date