CAO 98-27
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CITY OF MIAMI BEACH
OFFICE OF THE CITY ATTORNEY
MEMORANDUM
TO:
Sergio Rodriguez
City Manager
I
Murray H. Dubbin ~
City Attorney NS\
Raul J. AguilaM ~ ~:L-
First Assistant City Atto~ey
C.M.O. NO. 1-10/98
C.A.O. NO. 98-27
FROM:
SUBJECT: COBB DEVELOPMENT AGREEMENT/PURCHASE OF PROPOSED LIBRARY
FACILITY LOCATED WITHIN COBB PROJECT
DATE: March 24, 1999
The following opinion addresses your inquiry regarding the above-referenced Project;
specifically, as to whether the City is obligated to purchase a condominium unite s) within the Project
to be used as a public library facility. The words "City", "Agency" and "RDA" are hereafter used
interchangeably.
Pursuant to Exhibit J of the original Development Agreement between the Miami Beach
Redevelopment Agency (the Agency) and Cobb Partners Development, Inc. (Cobb or, in the
alternative, the Developer), dated March 31, 1989, for a $61,600.00 land credit at closing and
$275,000.00 at completion, Cobb agreed to build and convey a commercial space within the Project
"only to a party or parties that will purchase outright and contribute to the City of Miami Beach not
later than the issuance of a Certificate of Occupancy on the 100 condominium unit, one or more
commercial condominium units constituting a library facility within the Project of approximately
5,000 square feet." (See Section 10 and Exhibit J(4) of the original Development Agreement).
Additionally, Cobb agreed to provide the finished shell of a library facility, with an interior
improvement allowance of $54,500.00.1
As set forth in the Agency's Status Report on the Cobb Project, initially dated March 17,
1999, the original Development Agreement reflected an estimated construction for the cost of the
library facility of$795,000.00, which is based on a $520,000.00 donation by the Developer, and the
$275,000.00 purchase price. As set forth in page 5 of that Status Report, "Assuming the CitylRDA
consummates this purchase, it is implied that, at a minimum, an additional $520,000.00 in value will
accrue to the benefit of the CitylRDA. The anticipated total value may be in excess of the
Exhibit J( 4) of the Development Agreement does not define who the "party or parties"
that would purchase the library facility and contribute it to the City are, nor are they defined in any
of the subsequent modifications to the original Development Agreement. The term "party or parties"
could refer to the Agency.
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.. $795,000.00 construction cost reflected in the Development Agreement." As also set forth in the
Status Report, upon closing on the library facility, the Agency becomes responsible for the
applicable condominium maintenance fees, which are approximately $1,156.90 per month, or $13,
883.00 per year.
In Section 6 of the Third Extension and Clarification Agreement, dated February 23, 1995,
the Agency reaffirmed its obligation to, among other items, "provide the public facilities referenced
in Paragraph 10 and Exhibits J and K of the Cobb Development Agreement." (See Third Extension
and Clarification Agreement, Section 6, vii.). Exhibit J included the conveyance of the library
facility .
In Addendum No. I to the Third Extension and Clarification Agreement, executed on
February 13, 1997, the parties agreed to extend Cobb's delivery of the library facility, by eighteen
(18) months from their prior contractual deadline dates. Theoretically, this meant that Cobb would
have eighteen (18) months from the outside date specified by the original Development Agreement
to convey the library to the City; that is, eighteen (I 8) months from a date "not later than the
issuance of a Certificate of Occupancy on the 100th condominium unit." Since the I OOth unit is far
from completion, the 18 month period is not really relevant.
In negotiating the original Development Agreement, the parties agreed that certain public
facilities must be provided in a timely fashion by each party. As memorialized in Exhibit J to the
Development Agreement, one of these was the library facility. Clearly, the intent of the
Development Agreement was that this facility be provided for the City; the question of who would
ultimately purchase the facility is undefined, both in the original Development Agreement, and as
same was subsequently modified. To date, the Agency and Cobb have proceeded under the
assumption that the purchase of the library facility is the Agency's responsibility. The timeliness of
delivery and Developer's performance of other obligations may have some relevancy to the
respective responsibilities of the parties.
Should the City not wish to accept the library facility for the $275,000.00 purchase price set
forth in the original Development Agreement, then the City should seek to negotiate an amendment
to the Development Agreement. Otherwise, there may exist a contractual obligation under the
Agreement to purchase same on behalf of the City.
Finally, you requested that, if the City (or a party or parties on behalf of the City) purchases
the library facility, can it be utilized for any other purpose? Again, Exhibit J to the original
Development Agreement, as well as subsequent modifications to the Development Agreement, as
noted herein, specify that the space be used expressly for a library. Therefore, should the City wish
to proceed with the purchase of the commercial unit( s), and use same for other than a library facility,
we would similarly recommend that an amendment to the Development Agreement be negotiated
to memorialize any alternative recommended use.
Should you have any questions or comments regarding the above, please do not hesitate to
contact me.
RJAIkw
F:\AITOIAGURICA0\91-27.CAO
cc: Christina M. Cuervo, Assistant City Manager
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