Memo 030-2013 Management Agreement - UNIDAD H
OFFICE OF THE CITY MANAGER
MEMORANDUM
-0 030 0/,3
TO: Phillip Levine, Mayor / n; :T
FROM: Jimmy L. Morales, City Manager
DATE: December 9, 2013 c-n
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SUBJECT: Management Agreement("Agreem[nt"') between the City of Miami Beach,
Florida and Unidad of Miami Beach, inc. ("Unidad"), dated as of
September 6, 2006, in connection with the Site known as the North Beach
Senior Center, located at 7251 Collins Avenue, Miami Beach, FL 33139
("Senior Center", "Center"or"Site").
The purpose of this Memorandum is to provide you with a summary of the terms of the
Agreement and chronology with respect to the status of the Senior Center.
Terms of the Management Agreement:
Management Agreement dated September 6, 2006
Site size: 3,765 square feet on first floor and 4,162 square feet on 2nd floor, for a total of
7,927 square feet.
Use - City owned the Site and Unidad agreed to demolish the existing Senior Center and
rebuild a larger Center, including building public restrooms on the first floor.The value of the
improvements had to be a minimum of$1,000,000.00 and the City contributed $500,000,
from Resort Tax funds, in addition to previously allocated Community Development Block
Grant ("CDBG") funds and Community Development Block Grant Recovery ("CDBGR")
funds. The improved Site would continue to be used to provide seniorprograms, such as
employment services, training and other related elderly services.
Maintenance: The structure is owned by the City but managed and maintained by Unidad.
The City has the responsibility for maintaining the capital improvements or infrastructure
(roof, hvac, plumbing and sewer lines, major electrical)
Term: Forty years from September 30, 2006 and ending September 29, 2046 with four(4)
additional automatic ten year renewals, so long as Unidad is not in default thereunder.
Construction:
The concept Plan was approved on January 17,2007,establishing Commencement Date as
of May 17, 2007; Building Permit was due May 16, 2008.
On October 21, 2009, the timelines were extended, as follows: Building Permit timeline
extended through December 1, 2009;Commencement of Construction to February 1,20109
and Substantial Completion date to June 1, 2011.
Memo—Unidad North Shore Senior Center
December 9,2013
Page 2 of 4
On November 25, 2009,the building permit timeline was extended through March 31, 2010
and therefore the Substantial Completion date through September 30, 2011.
The Center received its Temporary Certificate of Occupancy onSeptember 5, 2012;
On March 13, 2013, Staff sent a letter agreement to Unidad requesting clarification with
respect to the definition of Substantial Completion of the Proposed Improvements under the
Agreement,defining it as"the date a Certificate of Occupancy is issued", but Unidad did not
sign and return the letter agreement.
On June 17, 2013, the full certificate of occupancy was issued.
Construction Defects: The Senior Center has not opened, primarily due to the defective
installation of the terrazzo flooring for the balcony, at the second level; uneven flooring of the
interior terrazzo floor, at the second level; and air conditioning noise at the second level.
The following are the open construction punch list items cited by Unidad ("Construction
Punch List"):
Exterior Terrace Terrazzo Floor Surfacing (Second Level) — The exterior balcony terrace
terrazzo finish has cracked at multiple locations and does not have the number and spacing
control joints that are intended to minimize such cracking. The entire flooring surface on the
terraces will require removal and reinstallation.
Interior Second Floor Terrazzo Floor surfacing — The second floor terrazzo surface is
irregular and out of place to such a degree that itdoes not comply with industry standards
and is not suitable for its intended use. It has concave and convex curves, requiring that the
floor be reworked by grinding or replacement as may be required to match the unaffected
areas.
Exterior Beach Access Promenade First Floor— Cove lighting recessed in the stairway is
irregular requiring re-working of the stair risers. Junction boxes and edges are cracking at
various locations. Cracks in the finish surfaces of the terrazzo require reworking or
replacement.
The handrails leading to the beach are not functional in their current location and require
realignment.
Terrazzo Stair Treads—The precast stair treads on the exterior of the building are stained
due to rust from fasteners, but same can be removed with rust stain chemicals without
damaging the terrazzo finish.
Exterior Decorative Panels — The painted panels have blisters and signs of corrosion at
various location primarily associated with fasteners. The Defects can be repaired with
routine sanding and refinishing without the necessity of removal of the panels.
North entrance ramp at grade (North Park)— Numerous cracks have occurred at the slap-
on-grade ramp walkway,repairable by utilizing a protocol of v-groove widening and filling of
non-shrink epoxy grout combined with grinding,followed by a slip resistant concrete coating.
Memo—Unidad North Shore Senior Center
December 9, 2013
Page 3 of 4
HVAC sound attenuation on second level—The air-conditioning system serving the second
floor is severely oversized and therefore generates noise. It must be modified and adjusted
to set existing AC systems for multi-stage operation, corresponding to the occupancy load.
It must reduce the air flow and noise to and acceptable level.
Roof Top Plane Deviation (roof hump) —The aesthetically displeasing appearance of the
edge of the roof appears to be a function of an application of the lightweight concrete that
has been placed to a point of termination and not tapered. They are looking at options to
remedy. One remedy, adding a small parapet wall consisting of metal frame and plywood,
may not resist high wind hurricane event,thereby compromising the entire roofing system.
Alternatively, the roof may be left as is or lightweight wall may be utilized to correct.
Open City Construction Items
The City is assisting with completing certain punch list items which are the City's
responsibility, such as the installation of exterior Bollard lights and installation of hand
guardrails or installation of demarcation strips several feet from a change in elevation of the
surrounding terrace stairs(the grey and white tones of the terrazzo floor blend together and
someone may not be able to determine that the floor ends and coud fall).
On July 12, 2013, Staff requested the outstanding deliverables, due upon obtaining the
Certificate of Occupancy, such as contractor's Affidavit, as-built drawings, architect's
attestation that the project was complete. Additionally,the updated insurance certificate was
requested.
The administration has been periodically requesting a timeline for the completion of the open
punch list items as well as documentation substantiating that Unidad is pursuing the
subcontractors responsible for the open construction items. A timeline for remediation has
not been received to date.
On September 19, 2013 — Unidad provided City with the default notifications sent by the
Contractor, Plaza Construction, sent to the installers of the terrazzo floor as well as their
sureties.
On September 24, 2013 Staff requested the open deliverables for a second time, including
the status of any funds which Unidad had not disbursed and an updated budget.
On September 25, 2013, Kathie Brookes requested again the timeline for remediation via e-
mail to Victor Diaz, Esq.
November 21, 2013— Letter advising Unidad that they need to open the Center, a copy of
which is attached, was sent out via e-mail and certified mail.
Community Development Block Grant Recovery ("CDBGR") funds— Pursuant to
Amendment No. 1 to the Community Development Block Grant- Recovery Agreement,the
Senior Center had to be open by September 30, 2012. The City advised HUD that the
Center has yet to open, contrary to reports submitted last year At this juncture, HUD has
not required the return of CDBG-R funds. However, according to the terms of the funding
award, HUD may require the City to repay$391,107for failing to meet the National Objective
by September 30, 2012 as required.
Memo—Unidad North Shore Senior Center
December 9, 2013
Page 4 of 4
National Objective: In connection with securing CDBG-R funds, Unidad represented to HUD
that they would provide the following services at this Senior Center in support of the National
Objective of providing services to low- and moderate-income elderly residents:
A. Senior Center Meals Program — Provide 144 nutritious, culturally- and age-
appropriate meals per day, five days per week for 50 weeks per year to low- and
moderate-income elder residents;
B. Senior programs and services—employment training, health services, counseling,
refugee and immigration services, and other like services.
Unidad's Position: They cannot open the Center while construction is occurring and the
center still has life-safety issues.
City's Position: The City recognizes that the remediation could be sufficiently impactful,such
that the building may not be able to be occupied during remediation, and therefore has tried
to work with Unidad to expedite remediation. However, remediation has not started and sub-
contractors and sureties are not responding quicky so this matter could drag for months or
years if there is litigation. In the meantime,the open Construction Punch List remains of an
aesthetic and not functional nature. The Center could be open for business, meeting the
National Objectives which Unidad represented to Hud that it would provide to the senior
citizens. At the point in time when the sub-contractor agrees to complete the work or pay for
the cost to remediate the work by a separate contractor, the issue of whether or not the
center could remain open during construction can be addressed. Additionally, the Center
could o uring the day until such time as the exterior lights are installed.
JLM/K /MS/MR
Attachments: Letter to Unidad -Third Request for Deliverables dated November 21, 2013
c: Deede Weithorn, City Commissioner
Jonah Wolfson, City Commissioner
Edward L. Tobin, City Commissioner
Micky Steinberg, City Commissioner
Michael Grieco, City Commissioner
Joy Malakoff, City Commissioner
Kathie G. Brooks, Assistant City Manager
Max Sklar, Tourism, Culture and Economic Development Director
Maria Ruiz, Housing & Community Development Interim Director
F:/RHCD/$ALUECON/$ALUASSET/UNIDAD SENIOR CENTER/MEMORANDUM TO MAYOR 12-2-2013
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k.
1AM1 BEACH
City of Miami Beach, 1700 Convention,Center Drive,Miami Beach,Florida 33139,www.miam,ibeoi:hfi.gov
Jimmy L. Morales, City Manager
Tel:305-673-7 010,Fax:305-673-7782
CERTIFIED MAIL- RETURN RECEIPT REQUESTED
November 21.t 2013
Ms. Margarita Cepeda-Leonardo Copy sent via electronic correspondence
Executive Director to: mcepeda@Uhidadmb.org
UNIDAD of Miami Beach
1701 Normandy Drive
Miami Beach,.FL 33141
Re: MANAGEMENT AND OPERATION AGREEMENT BETWEEN THE CITY OF MIAMI
BEACH (CITY) AND UNIDAD OF MIAMI BEACH, INC. ("UNIDAD"), DATED
SEPTEMBER 30, 2006, AS AMENDED ("AGREEMENT-)
Dear Ms. Cepeda-Leonardo:
I hope this correspondence finds you well. As a follow up to previous correspondence from our
staff,as Well as discussions held With your project representative,Victor Diaz,,Esq...please note that
we have requested a timeline for the opening of the Senior Center Cente r" and,to date we have
not received.a response.
qp
At this juncture, Unidad has failed to open the Center within the time frame required,under Section
9.7.1 of the Agreement, which provides in pertinent part that"'The Senior Center will commence
operations pursuant to this Agreement upon completion of the proposed capital improvements and
renovation of the Premises...'" The temporary certificate of occupancy was issued on September 5,
2012 and the full certificate of occupancy was issued on June 17, 2013; however,to date, Unidad
has failed.to open the center for community services.
I understand that you have outstanding construction punch list items, some of which involve the
remediation of the installation of the terrazzo floor on the second story:of the facility; however,
Unidad has had a reasonable amount of time to resolve any imminent punch list items and the lack
of response regarding even a timeline for the remediation of the terrazzo floor is a significant
concern; particularly regarding Unidad's compliance with the national objectives proposed to the
._.....0 n ited.States Department.of,Hou.sing and Urban,Development.("HUD".).,-including;providing the
Unidad Senior Center Meals Program and recreational, educational and cultural programs for
seniors.
In addition, pursuant to Section 9.7.7 of the Agreement, upon "Substantial completion",Which is
defined as requiring the issuance of a temporary or final certificate of occupancy, UNIDAD is
required to furnish the City with the following d6liverables,which were previously requested but to
date have not been provided:
(a) A.certification from UNIDAD's architect,certified to the City,on the standard AIA certification
.........................
UNIDAD of Miami Beach, Inc.
November 29, 2013
Page 2 of 2
form that the architect has examined the plans and specifications and that based upon the
architect's professional judgment, after diligent inquiry, the proposed improvements were
substantially completed in accordance with the plans and specifications and in accordance
with the applicable codes and laws;
(b) A copy of the temporary and final certificates of occupancy;
(c) Lien waivers from each contractor,subcontractor,supplier or materialmen retained by or on
behalf of UNIDAD;
(d) A complete set of"as built" plans and a survey showing the improvement(s);
(e) A Contractor's Final Affidavit, executed by the General Contractor, evidencing that all
contractors,subcontractors, suppliers and materialmen,in connection with the construction
of the improvements, have been paid in full;
(f) Certification from UNIDAD to the City that it has expended the minimum sum of
$500,000.00, in connection with the total construction costs.
As previously requested by City staff,kindly provide an itemization of any funds,previously received
from the City, including any Community Development Block Grant ("CDBG") funds and/or CDBG
Recovery funds(collectively referred to as"Development Funds"),which have not been disbursed.
With respect to the Development Funds which have been disbursed,please provide an accounting
of how those funds were spent, including copies of cleared checks and the most recent budget for `
this project.
I refer you to Section 27 of the Agreement,which sets forth the default and termination provisions of
the Agreement. This Section states that if either party fails to perform in accordance with any of the
terms and conditions of this Agreement, and such default is not cured within thirty(30) days after
written notice is given,the aggrieved party may pursue default remedies,which include,but are not
limited to the right to terminate this Agreement and pursue any and all legal remedies available at
law. Additionally, the City reserves the right to the reversion of funds which Unidad has received
but has not expended and/or has not expended in accordance with the previously signed
Community Development Block Grant agreement and/or Community Development Block Grant
Recovery Agreements (collectively"CDGB Grant Agreements").
While the City has every right to move forward to default Unidad under the Agreement, it is our
sincere hope that Unidad will expeditiously move to open the Senior Center within thirty(30)days
from receipt of this letter. In addition, Unidad must provide the City with the information required
pursuant to Section 9.7.7 of the Agreement within thirty (30) days from receipt of this letter.
Si cerely,
my L. wales, City Manager
J M/
c ax Sklar, Director for Tourism, Culture and Economic Development
Kathie G. Brooks, Assistant City Manager
Raul Aguila, Chief Deputy City Attorney
Maria Ruiz, Director Office of Community Services
Gisela Nanson Torres, Leasing Specialist
FA$A111Asset\UNIDAD1Third Request for Deliverables November 21,2013
We are committed to providing excellent public service and safehl to all who rive,work,and play m our vibrant:tropical,h!s`Aric community,