2010-27307 ResoRESOLUTION NO. 2010-27307
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING ON FIRST READING, A
LEASE AGREEMENT BETWEEN THE CITY AND IMMUNITY, INC., FOR
USE OF APPROXIMATELY 3,036 SQUARE FEET OF CITY-OWNED
PROPERTY, LOCATED AT 1130 WASHINGTON AVENUE, 7T" AND 8T"
FLOORS, MIAMI BEACH, FLORIDA; SAID LEASE HAVING AN INITIAL
TERM OF THREE YEARS, WITH TWO ADDITIONAL THREE YEAR
RENEWAL TERMS, AT THE CITY'S SOLE DISCRETION; WAIVING BY
5/7THS VOTE, THE COMPETITIVE BIDDING AND APPRAISAL
REQUIREMENTS, AS REQUIRED BY SECTION 82-39 OF THE MIAMI
BEACH CITY CODE; FURTHER SETTING A PUBLIC HEARING ON
FEBRUARY 3, 2010, FOR THE SECOND READING (AND FINAL
APPROVAL) OF THE LEASE AGREEMENT
WHEREAS, on October 21, 2008, the Finance & Citywide Projects Committee
(F&CPC) acknowledged that the City-owned Historic City Hall building (the "Building") was
not needed for City offices and instructed the Administration to advertise, market and
negotiate leases for available spaces within the Building; and
WHEREAS, Immunity, Inc. has expressed interest in leasing office space on the 7th
and 8th floors of the Building; and
WHEREAS, on November 16, 2009, the F&CPC approved the proposed lease,
said proposed lease having an initial term of three (3) years, commencing June 1, 2010
and ending May 31, 2013, with two (2) additional three (3) year renewal terms, at the City's
sole discretion; and
WHEREAS, Section 82-39 of the Miami Beach City Code, governing the sale/lease
of public property, requires a competitive bidding process, a Planning Department analysis,
and an independent appraisal to determine the value of the leasehold interest, as well as
two (2) readings of the proposed lease, with the second (and final) reading followed by an
advertised public hearing to obtain citizen input; and
WHEREAS, the Administration would hereby recommend that the Mayor and City
Commission approve the attached Lease Agreement on first reading, and hereby set the
public hearing on February 3, 2010, for second reading and final approval of the
Agreement; and
WHEREAS, Section 82-39 of the City Code further provides for the waiver of the
competitive bidding and appraisal requirements, by 5/7cns vote of the Mayor and City
Commission, for leases of City land, upon a finding by the Mayor and City Commission that
the public interest would be served by waiving such conditions; the Administration would
also hereby recommend that the Mayor and City Commission approve said waiver.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby approve on first reading, a Lease Agreement between the City and
Immunity, Inc., for use of approximately 3,036 square feet ofCity-owned property, located
at 1130 Washington Avenue, 7th and 8th floors, Miami Beach, Florida for an initial term of
three years, with two additional three year renewal terms, at the City's sole discretion, and
waiving by 5/7tns vote, the competitive bidding and appraisal requirements, as required by
Section 82-39 of the Miami Beach City Code; further setting a public hearing on February
3, 2010, for the second reading (and final approval) of the Lease Agreement.
PASSED and ADOPTED this 13th day of January, 2010.
ATTEST:
G(i(. C~
Robert Parcher, CITY CLERK tti Herrera o e , AYOR
JMG\HMF\AP\rlr
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APPROVED AS TO
FORM & LANGUAGE
OR CUTION
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COMMISSION ITEM SUMMARY
Condensed Title:
Request for approval for a Lease Agreement between the City and Immunity, Inc. for use of 3,036 SF of City-
, owned property located at 1130 Washington Avenue, 7th & 8th Floors, for a term of three years, with two
additional three year renewal terms, waiving by 5/7ths vote the competitive bidding and appraisal
requirements as required by Section 82-30 and setting a public hearing on February 3, 2010, for second
reading and public hearing.
Key Intended Outcome Supported:
Increase resident satisfaction with the level of services and facilities.
Supporting Data (Surveys, Environmental Scan, etc.): ~,
Approximately 40% of retail businesses surveyed, rank Miami Beach as one of the best places to do ''
business and 61 % of the same group would recommend Miami Beach as a place to do business.
Issue:
Should the Ci Commission a rove the lease a reement?
Item Summa
FIRST READING
On October 21, 2008, the Finance & Citywide Projects Committee (F&CPC) acknowledged that the City-
owned Historic City Hall building (the "Building") was not needed for City offices and instructed the
Administration to advertise, market and negotiate leases for available spaces within the building. The
Administration has been complying with the F&CPC's instructions for over a year. On November 16, 2009,
the F&CPC recommended approval of the proposed lease with the following terms:
• Square Footage: 3,036 per updated 2009 City survey;
• Term: Three years with two additional three year renewal terms;
• Base Rent: $25.30 PSF - $38,223.24 annually, payable monthly @ $3,185.27, with 3% annual
increase;
• Additional Rent: $38,587.56 annually, payable monthly @ $3,215.63 to offset City's operating
expenses and insurance costs;
• Security Deposit: Prior to execution of the Lease, the Tenant will furnish the City a Security Deposit
in the sum of $12,801.80 (equal to two months of Rent and Additional Rent costs).
Section 82-39 provides for the waiver of the competitive bidding and appraisal requirements, by 517ths vote
of the Mayor and City Commission, upon a finding by the Mayor and City Commission that the public interest
would be served by waiving such conditions. At the March 10, 2009 meeting of the F&CPC, the Committee
determined that it was in the public's best interest to forgo competitive bidding and staff should proceed in
leasing available space in the Building according to market rates and industry standards.
A Planning Department analysis finds that the use of this space is consistent with the land use designation
contained in the Comprehensive Plan. It is recommended that the Mayor and Commission approve the
Lease Agreement on first reading and set a second reading/public hearin .
Adviso Board Recommendation:
Finance & Ci ide Projects Committee, October 21, 2008 and March 10, 2009.
Financial Information:
Source of Funds: Amount Account
n/a 4 n/a _ _
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
~ nna Parekh, extension 7193
Sign-Offs•
Department Director Assists City Manager City Manager
AP JMG
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E M I AM I B EAC H AGENDA ITEM 1 F
~' DATE I-l3 c0
m MIAMIBEACH
City of Miami Beath, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: January 13, 2010 FIRST READING
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, APPROVING ON FIRST READING, A LEASE AGREEMENT
BETWEEN THE CITY AND IMMUNITY, tNC., FOR USE OF APPROXIMATELY 3,036
SQUARE FEET OF CITY-OWNED PROPERTY, LOCATED AT 1130 WASHINGTON
AVENUE, 7T" AND 8T"FLOORS, MIAMI BEACH, FLORIDA; SAID LEASE HAVING AN
INITIAL TERM OF THREE YEARS, WITH TWO ADDITIONAL THREE YEAR RENEWAL
TERMS, AT THE CITY'S SOLE DISCRETION; WAIVING BY 5/7THS VOTE, THE
COMPETITIVE BIDDING AND APPRAISAL REQUIREMENTS, AS REQUIRED BY
SECTION 82-39 OF THE MIAMI BEACH CITY CODE; FURTHER SETTING A PUBLIC
HEARING ON FEBRUARY 3, 2010, FOR THE SECOND READING (AND FINAL
APPROVAL) OF THE LEASE AGREEMENT
ADMINISTRATION RECOMMENDATION
Adopt the Resolution and set a second reading, public hearing.
KEY INTENDED OUTCOMES SUPPORTED
Increase resident satisfaction with the level of services and facilities.
BACKGROUND
At the October 21, 2008 meeting of the Finance & Citywide Projects Committee (F&CPC), and
subsequently at their meeting of March 10, 2009, and following a comprehensive review of the
City's office space use, it was determined that Historic City Hall would not be fully re-occupied by
City offices, resulting in leasable space availability for non-City uses. The Committee directed the
Administration to advertise and market the available leasable space, a total of approximately 14,194
sq. ft., including the ground floor, but exclusive of the second floor space utilized by the Clerks of the
Courts.
At the meeting, the Committee also approved the Administration's recommendation that the process
of developing lease agreements based on supply and demand be utilized for the leasing and
occupancy of these available spaces, and that any future commercial leases (including renewals
and/or extensions) for use of space at Historic City Hall be handled as it is in the private sector and
not through a competitive bid process, with the administration ensuring that market rates are
negotiated and operating expenses included. All leases would continue to require City Commission
approval per City Code.
ANALYSIS
Staff has marketed the location using typical real estate marketing tools. However, based on the I,
fluctuation of the current real estate market in this economic environment, the City requested an
appraisal, which was performed by Bondarenko & Associates, Inc. to determine the market rent
value; with a revised appraisal provided on July 7, 2009 to reflect further changing conditions. The j
Commission Memorandum
Immunity, Inc.
January 13, 2010
Page 2 of 6
resulting market rental rates of $25-$30 PSF were determined to be based on gross rent, full
service. The $25 PSF market rent for floors 1 - 7 was set as an average, with a premium for the Stn
Floor penthouse set at $30 PSF. The highest and best use for the entire building was deemed to be ',
"office", with the notation that the ground floor potential use as retail commercial is not practical due
to the restrictions of the historic designation of the building.
At the November 16, 2009, F&CPC meeting, staff presented a lease for consideration involving the
7th and 8th floors of the building with Immunity, Inc. Immunity, Inc. is a computer security software
company founded in 2002 that is currently occupying office at 1247 Alton Road in Miami Beach. As
part of the City's due diligence process, the Administration contacted immunity's current Landlord
and determined Immunity to be a tenant in good standing.
The F&CPC recommended approval of the proposed rate of $25.30 PSF for 3,036 SF of office
space. In accordance with the F&CPC's recommendations, staff has proceeded to negotiate a lease
agreement for City Commission approval. A summary of the proposed lease terms are as follows:
TENANT: Immunity, Inc., a Florida corporation.
DEMISED PREMISES: 3,036 SF on the 7th and 8th Floors of Historic City Hall, located at 1130 ~~'
Washington Avenue.
TERM: Initial term of three (3) years, with two (2) additional three (3) year renewal ;'
options, at the City's sole discretion.
i
COMMENCEMENT DATE: June 1, 2010.
i
BASE RENT: $25.30 PSF - $38,223.24 annually, payable in monthly installments of
$3,185.27. Base Rent (excludes Operating Expenses, Properly Taxes and
Insurance) shall be increased annually, on the anniversary of the
Commencement Date, in increments of three (3%) percent per year. i
ADDITIONAL RENT: $38,587.56 annually, payable in monthly installments of $3,215.63. Any ~
increase in Operating Expenses and Insurance will result in an increase to
Tenant's proportionate share.
PARKING: Tenant may request, from the City's Parking Department, the use of no more
than eight (8) parking spaces. Rates for said spaces are subject to change,
and are currently $70 per month plus applicable sales tax.
SECURITY DEPOSIT: Prior to the execution of the Lease, Tenant will furnish the City with a
Security Deposit in the sum of $12,801.80 (equal to two months Rent and
Additional Rent costs).
USES: The Demised Premises shall be used by the Tenant as office for providing
legal services. The Demised Premises shall be open a minimum of flue days
a week (Monday-Friday) from 9:OOAM to S:OOPM.
IMPROVEMENTS: No significant improvement and/or build-out is anticipated.
INSURANCE: Tenant shall comply with the following insurance requirements throughout
the Term:
Commission Memorandum
Immunity, Inc.
January 13, 2010
Page 3 of 6
Comprehensive General Liability in the minimum amount of $1,000,000 per
occurrence for bodily injury and property damage. The City of Miami Beach
must be named as additional insured parties on this policy, subject to
adjustment for inflation.
Workers Compensation and Employers Liability coverage in accordance with
Florida statutory requirements.
All-Risks property and casualty insurance, written at a minimum of 80% of
replacement cost value and with replacement cost endorsement, covering all
of Tenant's personal property in the Demised Premises (including, without
limitation, inventory, trade fixtures, floor coverings, furniture and other
property removable by Tenant under the provisions of this Agreement) and
all leasehold improvements installed in the Demised Premises by or on
behalf of Tenant, subject to adjustment for inflation.
PROPERTY TAXES: Property taxes for Property Tax Year 2009 are estimated at Zero Dollars
($0.00). Notwithstanding, the City makes no warranty or representation, that
the Historic City Hall building, the Land, and/or the proposed lease premises
will not be subject to ad valorem (or other) taxes in subsequent years. In the
event Miami-Dade County assesses the property, Tenant shall pay its
proportionate share of the property tax bill. Any property tax payment shall be
payable by Tenant immediately upon receipt of notice from the City.
Tax Stop.
Notwithstanding the preceding, in the event the property is subject to Miami-
DadeCounty property taxes, the City shall be responsible for payment of the
Property Tax Payment up to an amount not to exceed Three Dollars ($3.00)
per square foot (Tax Stop Amount) with Tenant to be responsible for
anything in excess of that amount. Tenant shall promptly reimburse the City
for its portion of the Property Tax Payment (if any) upon receipt of the City's
invoice for same.
UTILITIES: Tenant retains sole responsibility for all utilities (not included as part of
Operating Expenses) including janitorial, Internet and telephone services.
MAINTENANCE
AND REPAIR: Tenant shall be responsible for day-to-day maintenance and repairs of the
Demised Premises, including, without limitation, all fixtures, appurtenances,
equipment and furnishings.
CONCLUSION
Section 82-39 of the Miami Beach City Code, governing the sale/lease of public property, provides
that the tease of any City-owned property, including option periods, requires the following:
1) a public bidding process;
2) Planning Department analysis (see attached Exhibit A);
3) an independent appraisal to determine the value of the leasehold interest;
4) two (2) readings of the proposed lease; and
5) a public hearing to obtain citizen input.
Commission Memorandum
Immunity, Inc.
January 13, 2010
Page 4 of 6
Section 82-39 further provides for the waiver of the competitive bidding and appraisal requirements,
by 5/7ms vote of the Mayor and City Commission, upon a finding by the Mayor and City Commission
that the public interest would be served by waiving such conditions.
The proposed lease terms are within the range of comparable spaces in the area, and reflect the
current economic reality. This tenant's use is consistent with the uses envisioned for Historic City
Hall. Given the economic environment that has produced a high inventory of vacant office space in
the 33139 zip code (as demonstrated by LoopNet market research), the Administration recommends
that a lease agreement with Immunity, for use of the 7th and 8th Floors with the proposed terms, as
delineated herein, be approved on first reading. Additionally, the Administration recommends that
the City Commission waive by 5/7ths vote, the competitive bidding and appraisal requirements, as
required by Section 82-39 of the Miami Beach City Code, and set a public hearing on February 3,
2010, for the second reading (and final approval) of the Lease Agreement.
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Commission Memorandum
Immunity, Inc.
January 13, 2010
Page 5 of 6
EXHIBIT A
m MIAMI BEACH
PLANNING DEPARTMENT
INTEROFFICE MEMORANDUM
To: Anna Parekh, Real Estate, Housing & Comm. Development Director
FROM: Richard G. Lorber, Acting Planning Director -=
GL ~_...,_,_
DATE: December 22, 2009
SUBJECT: Analysis of Proposed Lease Agreement for Immunity, Inc.
7th and 8'h Floors, Old City Hall, 1130 Washington Avenue
Pursuant to your request, this memorandum will serve as a planning analysis of the
proposed lease agreement between the City and Immunity, Inc. (Tenant), for the use of
approximately 3,036 square feet of office space on the 7'h and 8~h floors of the City-
owned property known as Historic City Hall, located at 1130 Washington Avenue, said
lease agreement for an initial term of three (3) years, with two (2) additional three (3)
year renewal terms, at the City's sole discretion.
Section 82-38 of the Code of the City of Miami Beach requires that any proposed sale or
lease of City-owned land be analyzed from a planning perspective so that the City
Commission and the public are fully apprised of all conditions relating to the proposed
sale or lease. The following is an analysis of the criteria delineated in the Code:
1. Whether or not the proposed use is in keeping with city goals and
objectives and conforms to the city comprehensive plan,
Consistent -The property is located within the PF Public Facilities future land
use category, and surrounded by the CD-2 medium intensity commercial future land use
category. The proposed use is for office space for developing and providing information
security technologies and services. The lease agreement between the City and the
proposed tenant is consistent with the future land use category description contained in
the Comprehensive Plan.
2. The impact on adjacent property, including the potential positive or
negative impacts such as diminution of open space, increased traffic, noise level
or enhanced property values, improved development patterns and provision of
necessary services. Based on the proposed use of the property, the city shall
determine the potential impact of the project on city utilities and other
infrastructure needs and the magnitude of costs associated with needed
infrastructure improvements. Should it become apparent that further evaluation
of traffic impact is needed, the proponent shall be responsible for obtaining a
traffic impact analysis from a reputable traffic engineer.
Consistent -The property subject to the lease is in the existing Historic City Hall,
and previously was used as office space as well. There would be no diminution of open
space as no new construction is being proposed. No additional utility or infrastructure is
expected to be necessary.
Commission Memorandum
Immunity, Inc.
January 13, 2010
Page 6 of 6
Proposed Lease -Immunity, Inc.
~rh and 8th Floors, Old City Hall, 1130 Washington Avenue
December 22, 2009
Page 2
3. A determination as to whether or not the proposed use is in keeping with a
public purpose and community needs, such as expanding the city's revenue base,
creating jobs, creating a significant revenue stream, and improving the
community's overall quality of life.
Consistent -The proposal will accrue approximately $38,223.24 per year in rent,
plus operating expenses to the City, and there is a potential to create additional jobs.
The revenue stream generated will help defray the cost of maintenance needs of Historic
City Hall.
4. Determination as to whether or not the development is in keeping with the
surrounding neighborhood, will block views or create environmental intrusions,
and evaluation of the design and aesthetic considerations of the project.
Consistent -The surrounding neighborhood consists of the Washington Avenue
commercial corridor and the City of Miami Beach Police Headquarters. This office on
the 7'h and 8'h floors of Historic City Hall will not be out of character with the surrounding
uses. View and environmental considerations are not applicable.
5. The impact on adjacent properties, whether or not there is adequate
parking, street and infrastructure needs.
Consistent -The previous use on this property was office space, therefore, there
should be no negative impact on adjacent properties. As this use is existing, and is
adjacent to a parking garage, there are no issues with respect to required parking. No
further infrastructure needs are anticipated.
6. A determination as to whether or not alternatives are available for the
proposed disposition, including assembly of adjacent properties, and whether the
project could be accomplished under a private ownership assembly.
Not applicable -This is a City-owned property, of which this proposed use is a
small portion of the available space. No assembly of land is necessary, nor would such
be under private ownership.
7. Within the constraints of public objectives, the department should examine
financial issues such as job generation, providing housing opportunities, and the
return to the city for its disposition of property.
The proposed lease agreement will help to defray the cost of maintenance of the
building. No housing opportunities will be created.
8. Such other issues as the Planning Department may deem appropriate in
analysis of the proposed disposition.
Not applicable -The Planning Department has no other issues it deems
appropriate to analyze for this proposal.
RGUrgI
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