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Memo 031-2013 Management Agreement - Boys and Girls Club MIAMI BEACH OFFICE OF THE CITY MANAGER 2013 DEC 12 A["i 9: 52 MEMOR) NNXDWM OFF►C TO: Phillip Levine, Mayor FROM: Jimmy L. Morales, City Manager DATE: December 11, 2013 SUBJECT: Management Agreement ("Agreement" or"Management Agreement")) between the City of Miami Beach, Florida ("City") and Boys and Girls Club of Miami, Inc. ("BGCM-D"), dated as of November 5, 2008, involving the Site located at 1200 Meridian Avenue, Miami Beach, FL 33139 ("Site" for "Flamingo Park Facility"). 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 Boys&Girls Club Flamingo Park Facility. Terms of the Management Agreement: The Management Agreement was executed November 5, 2008. Term: Current Term: Initial 30-year term (November 1, 2008—October 31, 2038); plus two (2) renewable ten (10)-year terms. Scope of Development/Site size: The Management Agreement provides for the demolition of an existing Boys and Girls Club facility, located at Flamingo Park, having approximately 4,450 square feet (Existing Facility), and the construction of a new facility, at the same location and at the sole expense of BGCM-D (New Facility). The plans for the New Facility ("Proposed Improvements")call for the construction of a two-story, modular building having approximately 10,000 square feet ("Building"), in order for the facility to accommodate the enhanced programming anticipated at this New Facility. Use—The structure shall be owned by the City but managed by BGCM-D. The Site shall provide programs for the low-income, moderate-income, and at-risk youth in this area, including a wide range of health, social, educational, vocational, character and leadership development skills. Maintenance: Capital Improvements/Infrastructure: For the first ten years of the lease term, BGCM-D is responsible and required to pay for any costs related to capital improvements or infrastructure for the Premises(including roof,structural elements and infrastructure, HVAC, plumbing and sewer lines, major electrical, etc.). Commencing year 11 of the lease term, costs related to capital improvements or infrastructure shall be paid 50% by BDCM-D and 50% by the City (shared equally by the parties). Day-to-Day Maintenance: The day-to-day maintenance shall be the sole cost and expense of BGCM-D, including maintenance and repair of the Premises, improvements,fixtures and equipment in good clean, and sanitary order, day-to-day housekeeping,janitorial services and routine maintenance of the interior of the Premises, improvements, fixtures and equipment thereon, including daily removal of litter, garbage, and debris generated by I Memo—Boys and Girls Club December 11,2013 Page 2 of 3 BGCM-D's use. History/Construction Update: The Boys and Girls Club of Miami-Dade, Inc. (BGCM-D) has operated successfully in Flamingo Park for approximately eighteen (18)years and has served a significant number of low- and moderate-income children at their current facility. The Boys and Girls Club is a national organization with successful operations in a wide variety of communities across the United States, in addition to the Flamingo Park Facility. In order to improve the level of programming and demonstrate BGCM-D's commitment to the community, and as authorized by Resolution No.2008-26939,the City and BGCM-D entered into the Management, providing for the development of the New Facility. The Existing Facility has been demolished and BGCM-D has secured all necessary approvals for its preliminary plans and specifications, in connection with the construction of the proposed Improvements. The Building has already been constructed by the contractor, Royal Concrete Concepts, Inc. ("Contractor"), and is being stored at a facility, awaiting the completion of the site work, at which point the Contractor can transport the pre-constructed Building, in sections, to the construction site at Flamingo Park. On June 11, 2013, BGCM-D secured the building permit and at this junction the next stage of construction requires the site work necessary before the Building delivery and setting can take place at the Site. Pursuant to Section 9.7.8.1 of the Management Agreement, construction may not be commenced until BGCM-D has secured the building permit and the Contractor for BGCM-D has secured Builder's Risk Insurance ("Builders Risk Requirement") and a payment and performance bond, guaranteeing the performance by the Contractor ("Performance Bond Requirement"), for the protection of the Proposed Improvements and the parties to the Agreement (collectively referred to as "Contractual Requirements"). The Builder's Risk Requirement protects the City and BGCM-D from the loss of the building to any catastrophe such as a hurricane, fire and other similar risks. The Performance Bond Requirement protects the City and BGCM-.D if the Contractor defaults under the construction contract and fails to complete the Proposed Improvements. Pursuant to Section 9.7.8.2 of the Agreement, BGCM-D was required to commence construction within sixty days from the date it obtained the building permit (by August 10, 2013); however, BGCM-D had difficulty obtaining the Contractual Requirements through its Contractor and pursuant to Section 9.7.11 of the Agreement, for good cause, the City has provided BGCM-D with extensions of time needed to commence construction("Extension of Time"). The last Extension of Time, dated September 25, 2013, is attached hereto as Exhibit "1". The Contractor has been in the process of securing the Contractual Requirements but has suffered delays, due to the rigorous underwriting requirements which insurance companies are currently requiring. BGC-M and its Contractor have advised Staff that all contractual Requirements will be ready to submit to the City by December 31, 2013 and work may commence within a week thereafter. At the current stage, due to the nature of this development, the construction of the Building has already occurred and once the site work has been completed,which is estimated to take approximately three to four months(April of 2014), the delivery of the building and securing the certificate of occupancy should not exceed August, 2014, barring unforeseen circumstances. Based upon the foregoing, BGC-M is requesting an Extension of Time to Memo—Boys and Girls Club December 11,2013 Page 3 of 3 commence construction,through January 20, 2014, so that they will be in compliance under the Management Agreement. Community Development Block Grant Recovery (CDBG-R) and Community Development Block Grant(CDBG) funds: The City's Office of Real Estate, Housing and Community Development has provided BGCM-D with$376,117 from Community Development Block Grant(CDBG)and Community Development Block Grant— Recovery (CDBG-R) for this project as follows: Fan.ding Program Fiscal Year Amount CDBG 2006/2007 $ 100,000 CDBG 2007/2008 $ 200,000 CDBG-R 2008/2009 $ 26,117 CDBG. 2009/2010 1 $ 50,000 While this project has already been flagged for concern by the U.S. Department of Housing and Urban Development(HUD) because of its delay, the greater concern is that CDBG-R funds were required to have been fully expended and the funded project complete by September 30, 2012. As such, the project's delay exposes the City to the possible repayment to HUD for the CDBG-R funds($26,117).As of this writing, HUD has not notified the City of any action and the City continues to update HUD on the project's progress. BGCM-D's Position: The contractor will have the requisite Contract Requirements by December 31, 2013 and construction may begin within a week thereafter. The current extension for the commencement of construction expired on December 9,2013 and BGCM- D has requested an additional forty-five (45) day extension in order to allow sufficient time for their contractor to secure the Contract Requirements necessary to commence the remainder of the site work and thereafter assemblage of the Building., City's Position: The City recognizes that there have been some construction delays; however, in light of the fact that the Building is already constructed and the fact that BGCM- D is close to completing the project, the City is inclined to provide BGCM-D with the exte ion it has requested and shall monitor the project closely. J LM/ R Attachme . 1. Letter agreement extending time to commence construction, dated September 25, 2013. 2. BGCM-D's request for extension of time to commence construction. cc: Micky Steinberg, City Commissioner Group 1 Michael Grieco, City Commissioner Group 2 Joy Malakoff, City Commissioner Group 3 Jonah Wolfson, City Commissioner Group 4 Edward L. Tobin, City Commissioner Group 5 Deede Weithorn, City Commissioner Group 6 Kathie G. Brooks, Assistant City Manager Max Sklar, Tourism, Culture and Economic Development Director Maria Ruiz, Housing & Community Development Interim Director F:/RHCD/$ALUECON/$ALUASSET/FLAMINGO/BOYS&GIRLS CLUB/MEMORANDUM TO MAYOR 12-11-2013 I MIAM11BEACH 2 o 7 Z f City of Miami Beach, 1700 Convention Center Drive,Miami Beach,Florida 33139,www.midmibeachfl.gov TOURISM,CULTURE AND ECONOMIC DEVELOPMENT DEPARTMENT Office of Real Estate Tel:305-673-7193/Fax:305473-7033 September 25, 2013 Mr. Alex Rodriguez-Roig Executive Director Boys& Girls Clubs of Miami-Dade, Inc. 2805 SW 32nd Avenue P.O. Box 330199 Miami, FL 33133 RE: MANAGEMENT AND OPERATION AGREEMENT BETWEEN THE CITY OF MIAMI BEACH ("CITY")AND BOYS &GIRLS CLUB OF MIAMI, INC. ("BGCM"), DATED NOVEMBER 5, 2009("AGREEMENT"). APPROVAL OF BGCM'S REQUEST FOR AN EXTENSION OF TIME, PURSUANT TO SECTION 9.7.11 OF THE AGREEMENT,PROVIDING BCGM UNTIL DECEMBER 9,2013 IN ORDER TO COMMENCE CONSTRUCTION Dear Mr. Rodriguez-Roig; This letter shall acknowledge BGCM's request for an extension of time in which to commence construction through and including December 9, 2013, as a result of the general contractor's delay in securing a Payment and Performance Bond, as required pursuant to Section 9.7.8.1 of the Agreement,and a Builder's Risk/installation Floater Insurance,as required pursuant to Exhibit"B"of the Agreement, all of which are pre-construction requirements under the Agreement. Pursuant to Section 9.7.11 of the Agreement,the City agrees to extend the timeline for commencing construction, as set forth under Section 9.7.8.2 of the Agreement, from 60 days from the time in which the building permit was obtained (June 11, 2013),through and including December 9,2013. All other provisions of the Agreement shall remain in full force and effect. If the aforementioned terms and conditions meet with your approval, please have the duly authorized representatives of BGCM acknowledge, execute and attest to same in the spaces provided below..Upon execution by the City Manager,we will forward a fully executed copy to your attention for your records. In the meantime,should you have any questions or require any assistance, please don't hesitate to contact me. Sin er .ly, . M lar Directo of urism, Culture and Economic Development Department i Boys&Girls Clubs of Miami-Dade, Inc. September 25, 20:13 Page 2 of 2 MS/GNT CC: Jimmy L. Morales, City Manager Kathie G. Brooks, Assistant City Manager Raul Aguila, Chief Deputy City Attorney Maria Ruiz, Director of Community Services Gisela Torres, Leasing Specialist j 1 1 I have read this letter and fully understand same, agree to be bound by the terms and conditions contained herein. Boys and.Girls Clubs of Miami Dade, Inc., City o Miami Bea By: z 4 By: Signatur4 mmy L, Mbrales D ity Man ter Print.NameO,itle Attest: Signature TrQ L CivI/ �t Print Name ee F.•IRHCDI$ALLIECONI$ALLIASSETIFIamingot4cknowlegement Letter Extension from BP to CO September 6,2013 We ore committed to providing excellent public service and sofey to oil who live,work,and ploy in our vibront,tropicol,historic community.