592-2013 RDA Reso RESOLUTION NO. 592-2013
A RESOLUTION OF THE CHAIRPERSON AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY (RDA), ACCEPTING THE
RECOMMENDATION OF THE CITY'S FINANCE AND CITYWIDE PROJECTS
COMMITTEE PERTAINING TO A PROPOSED AMENDMENT NO. 3 TO THAT
CERTAIN RETAIL LEASE AGREEMENT BY AND BETWEEN THE CITY OF MIAMI
BEACH, THE MIAMI BEACH REDEVELOPMENT AGENCY (COLLECTIVELY,
LANDLORD OR LESSOR)AND PENN 17, LLC.(TENANT OR LESSEE), DATED
SEPTEMBER 16, 2011, INVOLVING THE LEASE OF APPROXIMATELY 7,655
SQUARE FEET OF GROUND FLOOR RETAIL SPACE AT THE PENNSYLVANIA
AVENUE GARAGE, 1661 PENNSYLVANIA AVENUE, MIAMI BEACH, FLORIDA;
APPROVING, SUBJECT TO THE PARTIES'SUCCESSFUL NEGOTIATION AND
EXECUTION OF AMENDMENT NO. 3 TO THE LEASE MEMORIALIZING SAME,
THE FOLLOWING.RELIEF WITH REGARD TO ITS PAYMENT OF RENT UNDER
THE LEASE: 1) APPLYING ONE THIRD (1/3) OF THE LESSEE'S EXISTING
SECURITY DEPOSIT, REPRESENTING$47,844,TOWARD BASE RENT OWED
FOR THE MONTH OF NOVEMBER 2012;2) DEFERRING$8,474 FOR COMMON
AREA MAINTENANCE (CAM) FOR NOVEMER 2012, AND BASE RENT PLUS
CAM FOR DECEMBER 2012, IN THE TOTAL AMOUNT OF $649792
(HEREINAFTER REFERRED TO AS THE BACK-DUE RENT); 3)APPROVING AN
ABATEMENT OF FIFTY PERCENT(50%) OF THE BASE RENT AND CAM DUE
FOR THE SIX(6)MONTH PERIOD COMMENCING JANUARY 1,2013 THROUGH
JUNE 30, 2013; 4) DEFERRING FIFTY PERCENT (50%) OF THE BASE RENT
AND CAM FOR THE SIX (6) MONTH PERIOD COMMENCING JULY 1, 2013
(DEFERRED RENT •
THROUGH DECEMBER 31,2013(D ), AND )
5 PROVIDING FOR
RE-PAYMENT BY LESSEE OF ONE THIRD OF THE SECURITY DEPOSIT, THE
BACK-DUE RENT AND THE DEFERRED RENT; ALL IN ACCORDANCE WITH
THE PAYMENT SCHEDULE ATTACHED AS EXHIBIT"A" HERETO; FURTHER
SETTING OF A PUBLIC HEARING,AS REQUIRED BY SECTION 142-362 OF THE
CITY CODE, FOR APRIL 17,2013,REGARDING LESSEE'S PROPOSAL TO ADD
AN ENTERTAINMENT COMPONENET AS A NEW PROPOSED USE FOR THE
LEASED PREMISES (AND AS PART OF LESSEE'S PROPOSAL TO "RE-
BRAND" AND REOPEN THE PREMISES).
WHEREAS, on April 13, 2011, the Mayor and City Commission adopted Resolution No.
2011-27647,approving a Lease Agreement(the"Lease"), between the City,the RDA and Penn 17
LLC.(Lessee), having a term of nine(9)years and 364 days,for use of approximately 7,807 square
feet of ground level retail space at the Pennsylvania Avenue Garage, 1661 Pennsylvania Avenue,
Miami Beach, Florida,for a restaurant(primary use),with ancillary uses for a bakery,a bar/cafe,and
a book and gift shop (the "Premises"); and
WHEREAS, on February 8, 2012,the Mayor and City Commission adopted Resolution No.
2012-0000, approving a First Amendment to the Lease, correcting the gross rentable retail space
from 7,807 square feet to 7,655 square feet, as well as providing for a corresponding reduction in
annual rent from $585,525 to $574,125, and the cost of Common Area Maintenance (CAM)from
$100,370 per year to $98,850 per year; and
WHEREAS,on June 6,2012,the Mayor and City Commission adopted Resolution No.2012-
27925, approving a Second Amendment to the Lease; 1)granting the Tenant a one(1)month rent
abatement and deferring an additional two(2)months'rent to be paid by the Tenant in lump sum or
in thirty six (36) equal monthly installments together with regular payments of rent, taxes and
Common Area Maintenance (CAM) costs, commencing in the third year of the Lease Term and
ending on the last day of the fifth year of the Lease Term; 2) increasing the size of the Tenant's
Additional Area (Storage Space), as defined in section 3.11 of the Lease, to include an additional
284 square feet, currently designated for storage of the building's flood panels;-3) increasing the
charge for Common Area Maintenance (CAM) from $98,850 per year to $101,690 to reflect the
increase in size of the Additional Area;and 4)constructing,at the Lessee's sole cost and expense,
a new replacement enclosure for the storage of flood panels, subject and pursuant to the
satisfaction and approval of the Lessor; and
WHEREAS,the Leased Premises,which housed the Cooper Avenue Restaurant,have been
closed since December 17, 2012; and
WHEREAS, the Lessee is requesting rent relief in connection with certain operational
complications resulting from the failure of its air conditioning system; and
WHEREAS,on December 20,2012,and January 24,2013,the Finance&Citywide Projects
Committee(FCWPC)expressed support for providing some level of relief to the Lessee,subject to
the inclusion of specific release language absolving the City of any liability regarding Lessee's cost
overruns and claims related to loss of business; and
WHEREAS, The FCWPC further recommended in favor of the following terms: 1)applying
one-third(1/3)of the Lessee's existing Security Deposit, representing$47,844,towards Base Rent
owed for the month of November,2012; 2)deferring$8,474 for Common Area Maintenance(CAM)
for November, 2012 and Base Rent, plus CAM,for December 2012, in the total amount of$64,792
(Back-Due Rent); 3) approving an abatement of 50% of the Base Rent and Common Area
Maintenance(CAM)due for the six(6)month period commencing January 1,2013 through June 30,
2013; 4) deferring fifty percent (50%) of the Base Rent and CAM for the six (6) month period,
commencing July 1, 2013 through December 31, 2013 ("Deferral Period"), to be repaid by the
Lessee in twenty four(24)equal monthly installments, commencing in the sixth year of the Lease
Term and ending on the last day of the seventh year of the Lease Term; and 5) providing for
repayment by Lessee of the one-third security deposit in the amount of$47,844 and re-payment of
the Back-Due Rent for November and December, 2012, in the amount of$64,791, to be repaid in
twelve(12)equal monthly installments commencing in the fifth year of the Lease Term and ending
on the last day of the fifth year of the Lease Term; all as further set forth in Exhibit "A" to this
Resolution; and.
WHEREAS,at the request of the FCWPC,the Lessee has provided the Administration with
a preliminary business plan which proposes"re-branding"and re-opening of the Leased Premises,
by July 13, 2012; and
WHEREAS, Lessee proposes that the Premises, when re-opened, will house three (3)
individual concepts; an anchor restaurant facing 17th Street, involving the Lessee's relocation of its
Bond Street Restaurant(currently located at the Townhouse Hotel); a celebrity chef late-night fast
casual eatery in the center section of the space; and (subject to City approval), a lounge/bar in the
existing bar area; and
WHEREAS,since the lounge/bar component proposes an entertainment use,which is not a
permitted use in the Civic and Convention Center(CCC)zoning district,a public hearing is required,
under Section 142-362 of the City Code, to approve such use.
NOW,THEREFORE, BE IT DULY RESOLVED BY THE CHAIRPERSON AND MEMBERS
OF THE MIAMI BEACH REDEVELOPMENT AGENCY(RDA),that the Chairperson and Members
of the RDA herby accept the recommendation of the City's Finance and Citywide Projects
Committee pertaining to a proposed Amendment No. 3 to that certain Retail Lease Agreement by
and between the City of Miami Beach, the Miami Beach Redevelopment Agency (collectively,
Landlord or Lessor)and Penn 17, LLC. (Tenant or Lessee), dated September 16, 2011, involving
the lease of approximately 7,655 square feet of ground floor retail space at the Pennsylvania
Avenue Garage, 1661 Pennsylvania Avenue, Miami Beach, Florida; approving, subject to the
parties' successful negotiation and execution of Amendment No. 3 to the Lease memorializing
same,the following relief with regard to its payment of Rent under the Lease: 1) applying one third
(1/3) of the Lessee's Security Deposit in the amount of$47,844 towards back-due Rent amounts
owed for the month of November,2012;2)deferring$8,474 for Common Area Maintenance(CAM)
for November, 2012, and Base Rent plus CAM for December, 2012, in the amount of $64,792
(Back-Due Rent); 3)approving an abatement of fifty percent(50%)of the Base Rent and Common
Area Maintenance(CAM)for the six-month period commencing January 1,2013 through June 30,
2013; 4) deferring fifty percent (50%) of the Base Rent and CAM for the six-month period
commencing July 1, 2013 through December 31,2013 (Deferred Rent); and 5) providing for re-
payment by Lessee of the one third Security Deposit, Back-Due Rent and Deferred Rent; all in
accordance with the payment schedule attached as Exhibit "A" hereto; further setting of a public
hearing, as required by Section 142-362 of the City Code, for April 17, 2013, regarding Lessee's
proposal to add an entertainment component as a new proposed use on the Leased Premises(and
as part of Lessee's proposal to"re-brand"and re-open the Premises), and.
PASSED AND ADOPTED THIS 13TH DAY OF MARCH, 2013.
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APPROVED AS TO
FORM&LANGUAGE
&FOR EXECUTION
Redevelop nt Age Date
General Couns
REDEVELOPMENT AGENCY ITEM SUMMARY
Condensed Title:
A Resolution approving the recommendation of the Finance and Citywide Projects Committee pertaining to a proposed
Amendment No. 3 to that certain Retail Lease Agreement by and between the City of Miami Beach, the Miami Beach
Redevelopment Agency, and Penn 17, LLC. (Lessee), dated September 16, 2011, involving the lease of approximately
7,655 square feet of ground floor retail space at the Pennsylvania Avenue Garage, 1661 Pennsylvania Avenue, Miami
Beach, Florida; recommending that, as part of said Amendment, the Chairperson and Members of the RDA approve the
following amended schedule of rent: 1) applying one third (1/3) of the Lessee's security deposit in the amount of$47,844
towards back-due rent amounts owed for the month of November, 2012; 2) deferring of $8,474 for Common Area
Maintenance (CAM) for November, 2012, and Base Rent, plus CAM, for December, 2012, in the amount of $64,792
(Back-Due Rent); 3) approving an abatement of fifty percent (50%) of the Base Rent and Common Area Maintenance
(CAM) for the six-month period commencing January 13 through July 12, 2013; 4) deferring fifty percent (50%) of the
Base Rent and CAM for the six-month period commencing July 13 through January 12, 2014; and 5) providing for re-
payment by Lessee of the one-third security deposit and Back-Due Rent for November and December,2012, in the
manner outlined in Schedule "A" attached to the Resolution; further setting a Public Hearing for April 17, 2013, regarding
Lessee's proposal to add an entertainment component to the use, as required by Section 142-362 of the City Code.
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:
Shall the City Commission authorize the Administration to finalize for execution Amendment No. 3 to the Lease
Agreement?
Item Summa /Recommendation:
The Tenant is requesting rent relief in connection with operational complications resulting from the failure of its air
conditioning system. The Tenant alleges that the current location of its air conditioning compressors located between the
first and second floor of the garage alongside the entrance ramp, is inadequate to support the size units required to cool a
restaurant operation of the scale involved in Cooper Avenue. As a solution, Tenant seeks to relocate all eight
compressors to the roof of the garage, (which relocation, if accomplished, will occupy five roof-top parking spaces). On
December 20, 2012, and January 24, 2013, the Finance & Citywide Projects Committee (FCWPC) considered proposed
terms and conditions for restructuring the Tenant's rent payments. The FCWPC expressed support for providing some
level of relief to the Tenant, but not at the risk of turning the City's position upside down and subject to the inclusion of
specific release language absolving the City of any liability regarding Tenant's cost overruns and claims related to loss of
business. The FCWPC further recommended in favor of modifying the Lessee's rent schedule as delineated in the above
title section. Additionally, the Tenant has provided the Administration with a preliminary business plan which proposes
that the restaurant, when re-opened by July 2013, will house three individual concepts: an anchor restaurant facing 17th
Street, involving the Tenant's relocation of its Bond Street Restaurant; a celebrity chef late-night fast casual eatery in the
center section of the space, and a lounge/bar in the existing bar area (The lounge bar). Since the lounge bar is being
proposed to include entertainment, which is not a permitted use in the CCC civic and convention center district, a public
hearing is required under Section 142-362 of the City Code to approve such use. Considering that Penn 17, LLC has
paid 50% of the January and February 2013 Base Rent and CAM, and given the length of time required to re-lease
the space to a new tenant, the Administration recommends that the City Commission accept the recommendation
of the FCWPC pertaining to the amended rent schedule in the manner outlined on the schedule attached as Exhibit
"A" hereto, and further setting a public hearing for April 17, 2013, regarding Lessee's proposal to add an
entertainment component to the use, as required by Section 142-362 of the City Code.
Advisory Board Recommendation:
Finance &Citywide Projects Committee approved on January 24, 2013
Financial Information:
Source of Amount Account
Funds:
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Anna Parekh, ext. 6471
Sign-Offs:
RHCD Director Actin Ass t Dik#ct4F Interim Executiv rector
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MIAMMEACH AGENDA ITEM
AGENDA
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' DATE 1
OD MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
REDEVELOPMENT AGENCY MEMORANDUM
TO: Chairperson and Members of the Miami Beach Redevelopment Agency
FROM: Kathie G. Brooks, Interim Executive Director AOL
DATE: March 13, 2013
SUBJECT: A RESOLUTION OF THE CHAIRPERSON AND MEMBERS OF THE MIAMI BEACH
REDEVELOPMENT AGENCY(RDA),ACCEPTING THE RECOMMENDATION OF THE
CITY'S FINANCE AND CITYWIDE PROJECTS COMMITTEE PERTAINING TO A
PROPOSED AMENDMENT NO. 3 TO THAT CERTAIN RETAIL LEASE AGREEMENT
BY AND BETWEEN THE CITY OF MIAMI BEACH, THE MIAMI BEACH
REDEVELOPMENT AGENCY, (COLLECTIVELY, LESSOR) AND PENN 17, LLC
(LESSEE), DATED SEPTEMBER 16, 2011, INVOLVING THE LEASE OF
APPROXIMATELY 7,655 SQUARE FEET OF GROUND FLOOR RETAIL SPACE AT
THE PENNSYLVANIA AVENUE GARAGE, 1661 PENNSYLVANIA AVENUE, MIAMI
BEACH, FLORIDA; RECOMMENDING THAT, AS PART OF SAID AMENDMENT,THE
CHAIRPERSON AND MEMBERS APPROVE THE FOLLOWING AMENDED SCHEDULE
OF RENT: 1)APPLYING ONE THIRD(1/3)OF THE LESSEE'S EXISTING SECURITY
DEPOSIT, REPRESENTING$47,844,TOWARD BASE RENT OWED FOR THE MONTH
OF NOVEMBER 2012; 2) DEFERRING $8,474 FOR COMMON AREA MAINTENANCE
(CAM)FOR NOVEMBER 2012,AND BASE RENT,PLUS CAM,FOR DECEMBER 2012,
IN THE TOTAL AMOUNT OF$64,792(HEREINAFTER REFERRED TO AS THE BACK-
DUE RENT); 3) APPROVING AN ABATEMENT OF FIFTY PERCENT (50%) OF THE
BASE RENT AND CAM DUE FOR THE SIX (6) MONTH PERIOD COMMENCING
JANUARY 13,2013 THROUGH JULY 129 2013;4)DEFERRING FIFTY PERCENT(50%)
OF THE BASE RENT AND CAM FOR THE SIX (6) MONTH PERIOD COMMENCING
JULY 139 2013 THROUGH JANUARY 12, 2014; AND, 5) PROVIDING FOR RE-
PAYMENT BY LESSEE OF THE ONE THIRD SECURITY DEPOSIT AND RE-PAYMENT
OF THE BACK-DUE RENT FOR NOVEMBER AND DECEMBER, 2012; ALL IN
ACCORDANCE WITH THE PAYMENT SCHEDULE ATTACHED AS EXHIBIT "A"
HERETO; FURTHER RATIFYING THE SETTING OF A PUBLIC HEARING BY THE CITY
FOR APRIL 17, 2013, REGARDING LESSEE'S PROPOSAL TO ADD AN
ENTERTAINMENT COMPONENT AS A NEW PROPOSED USE ON THE LEASE
PREMISES (AND AS PART OF LESSEE'S PROPOSAL TO "RE-BRAND" AND RE-
OPEN THE PREMISES), AND AS REQUIRED BY SECTION 142-362 OF THE CITY
CODE.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
On April 13, 2011,the Mayor and City Commission adopted Resolution No. 2011-27647,approving
a Lease Agreement, as amended on February 8, 2012, and June 6, 2012, respectively(the Lease),
having a term of nine (9) years and 364 days, between the City, the RDA (collectively, the Lessor)
Redevelopment Agency Memorandum
Penn 17, LLC-Retail Lease Amended Rent Schedule
March 13,2013
Page 2 of 5
and Penn 17, LLC. (Lessee or Tenant), for use of approximately 7,655 square feet of ground level
retail space at the Pennsylvania Avenue Garage, 1661 Pennsylvania Avenue, Miami Beach, Florida,
for a restaurant(primary use),with ancillary uses for a bakery, a bar/cafe, and a book and gift shop.
The space currently houses the former Cooper Avenue Restaurant, which has been closed since
December 17, 2012.
On November 15,2012, the City issued a letter putting the Tenant on notice of certain compliance-
related issues, including non-payment of rent for the months of October and November.
On November 21, 2012, the City received a letter in response to its 11/15/12 letter from Tenant's
legal counsel, Jeffrey Rynor, requesting rent relief in connection with operational complications
resulting from the failure of the air conditioning system on the Leased Premises. The Tenant
alleged that the current location of the air conditioning compressors, located between the first and
second floor of the garage alongside the entrance ramp, was inadequate to support the size units
required to cool a restaurant operation of the scale involved in Cooper Avenue. As a solution,
Tenant requested to relocating all eight compressors to the roof of the garage, (which relocation, if
accomplished, will occupy five roof-top parking spaces).
On December 12, 2012, the City Commission referred the Tenant's request to the City's Finance .
and Citywide Projects Committee (FCWPC) for discussion, subject to the Tenant remitting all
outstanding rent amounts due for October, November and December. Subsequent to the City
Commission meeting,the Tenant informed staff that it wasn't in a position to remit rent for the three-
month period, and instead remitted a wire transfer for the October, 2012 rent.
On December 17, 2012, the Tenant informed staff that it had closed Cooper Avenue Restaurant,
with the intent of re-opening in February, 2012 under a new name and concept.
ANALYSIS
The issue was addressed at the December 20, 2012 FCWPC, during which the Tenant presented
its request to reduce its rent payments by 50% over the next twelve(12) months; apply two months
of the three-month security deposit it had paid at Lease execution towards the back rent due for
November and December's rent; and have the City share in the cost of relocating the compressors
to the roof of the garage, (the cost of which was estimated to be approximately $65,000). The
Tenant also indicated that it would prefer to address the relocation of the compressors as well as the
kitchen exhaust venting (as was requested by the New World Symphony) at the same time and
under one engineering contract.
The FCWPC was in favor of entertaining a deferral of the Tenant's rent, but for period of less than
twelve months. It was not in favor of a rent abatement or on relinquishing a portion of the requested
security deposit, unless the Tenant could provide a Letter of Credit or performance bond. The
FCWPC directed staff to negotiate terms for a rent deferral to present to the City Commission, and
to also incorporate release language absolving the City of any liability with regards to any claims
made by the Tenant concerning construction delays and/or issues concerning the relocation of the
HVAC compressors, as well as the kitchen exhaust venting. The FCWPC also recommended
staving off further legal action, including proceeding to default the Tenant under the Lease and
commencing eviction proceedings, pending the outcome of negotiations. The Tenant was also
asked to provide an estimated time frame for re-opening the restaurant.
On January 2"d, staff proposed the following rent payment plan:
➢ November and December 2012 rent payments be deferred until year three of the Lease;
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Redevelopment Agency Memorandum
Penn 17, LLC-Retail Lease Amended Rent Schedule
March 13,2013
Page 3 of 5
➢ commencing on January 14, 2013 and through June 14, 2013, City will abate 50% of rents
due. This results in a rent abatement equivalent to three full month's rent;
➢ in the meantime, all outstanding sidewalk cafe fees, concurrency fees,and Resort Tax fees,
will be due and payable by January 8, 2013;
➢ Tenant was informed that due dates for the initial payments were important because the
January 16th City Commission agenda would be printed on January 9th and, in an effort to
demonstrate good faith,the City should receive the outstanding sidewalk cafe, concurrency,
and Resort Tax fees by January 8th. Tenant was further informed that the first 50% rent
payment must be received timely on January 14th so that the City Commission can be
informed on January 16th when the matter is discussed.
On January 3rd, Tenant rejected the above-stated proposal, stating that it had shown good faith by
paying October rent, and counter-proposed the following:
➢ reduce the security deposit by two months due to the major improvements made and the
value it has contributed to the building, and in light of the high rent for the space;
➢ as to concurrency fees, Tenant requested that amounts paid to date remain on account
pending a revision of the concept;
➢ as to the rent for 2013, the Tenant wished to pay 50%for 12 months at 50%, however, "for
the sake of finding a fast and manageable solution it would accept the following:
• first 6 months at 50% and the balance is permanently abated;
• second 6 months are also billed at 50% but the balance gets paid over year 5-6 as
rent additions, so the balance of 180K gets paid over 24 months, at approximately
$7500 per month."
After further negotiations, on January 9th, staff proposed:
➢ applying fifty percent(50%) of the security deposit, in the amount of$71,765 towards back-
due rent amounts owed for November and December 2012, totaling $112,635; leaving a
balance of $40,870 (Back Rent) to be repaid in six (6) equal monthly installments
commencing on July 13, 2013 and ending on January 14, 2014;
➢ granting an abatement of fifty percent (50%) of the Base Rent and Common Area
Maintenance(CAM)due for the six(6) month period commencing January 13,2013 through
July 12, 2013;
➢ reimbursement of that portion of the security deposit applied to the Back Rent, in the amount
of$71,765, to be repaid in twelve (12) equal monthly installments commencing in the fifth
year of the Lease Term and ending on the last day of the fifth year of the Lease Term;
➢ granting a deferral of fifty percent (50%) of the Base Rent and CAM for the six (6) month
period, commencing July 13, 2013 through January 14, 2014 ("Deferral Period"), to be
repaid by the Tenant in twenty four (24)equal monthly installments,commencing in the sixth
year of the Lease Term and ending on the last day of the seventh year of the Lease Term.
It should be noted that the repayment provisions proposed by staff for the replenishment of the
security deposit and the deferred rent were structured in a manner to mitigate any overlap in the
Tenant's pre-existing obligation to begin repaying the two-month rent deferral granted as part of
Amendment No. 2 to the Lease Agreement, which becomes effective commencing in Year 3 of the
Lease.
The Tenant responded to the January 9th proposal by saying that"what we truly need is to start the
repayment schedule in 2014 and concentrate on building the business in 2013." During further
discussions, the Tenant expressed:
3
Redevelopment Agency Memorandum
Penn 17, LLC-Retail Lease Amended Rent Schedule
March 13, 2013
Page 4 of 5
➢ that given the fact that it doesn't anticipate being back in operation and generating cash flow
until at least mid-2013, a nine(9)-month abatement of its rent be granted,from January until
September, 2013,
➢ remittance of the balance of the Back Rent owed, commencing in January, 2014.
Given the impasse on the negotiations,the Administration was unable to present a recommendation
to the City Commission, and instead reported back to the FCWPC on January 24, 2013,to request
further direction on how to proceed. It should be noted that ahead of the meeting, on January 16,
2013, staff sent a letter to the Tenant, demanding payment of outstanding Resort Tax, in the amount
of$9,295.43 (based on the Tenant's own reconciliation dated January 8, 2013), as well as half of
January's rent, in the amount of$28,158.87, plus applicable sales tax, as a condition precedent to
the matter being re-discussed at FCWPC on January 24,2013. On January 18,2013,Tenant hand-
delivered two checks: one in the amount of $9,295.43 representing payment of the outstanding
Resort Tax; and one in the amount of$30,003.20 representing 50% of the January rent plus sales
tax.
The FCWPC expressed support for providing some level of relief to the Tenant, but not at the risk of
turning the City's position upside down. The FCWPC was against allocating 50% of the security
deposit toward the outstanding rent due for November and December, 2012, and instead only
recommended releasing one-third of the security deposit, in the amount of $47,844, leaving a
balance of$64,791,to be repaid commencing in January, 2014(as requested by the Tenant). The
FCWPC further recommended in favor of the terms, as proposed by staff, including:
1) applying one-third (1/3) of the Lessee's existing security deposit, representing $47,844,
towards Base Rent owed for the month of November, 2012;
2) deferring $8,474 for Common Area Maintenance (CAM) for November, 2012, and Base
Rent plus CAM for December 2012, in the total amount of$64,792 (Back-Due Rent);
3) granting an abatement of 50% of the base rent and Common Area Maintenance (CAM)
due for the six (6) month period commencing January 13, 2013 through July 12, 2013;
4) granting a deferral of fifty percent (50%) of the Base Rent and CAM for the six (6) month
period, commencing July 13, 2013 through January 14, 2014 ("Deferral Period"), to be
repaid by the Tenant in twenty four (24) equal monthly installments, commencing in the
sixth year of the Lease Term and ending on the last day of the seventh year of the Lease
Term;
5) reimbursement of the security deposit amount applied to back rent in the amount of
$47,844, to be repaid in twelve (12) equal monthly installments commencing in the fifth
year of the Lease Term and ending on the last day of the fifth year of the Lease Term
A schedule reflecting the revised rent schedule, as proposed, is included as Exhibit "A" to this
memorandum. Tenant has paid 50% of the January and February 2013 Base Rent and CAM.
The FCWPC again insisted that any agreement with the Tenant be subject to the inclusion of
release language absolving the City of any liability. Commissioners Weithorn and Exposito voted in
favor of the recommendation, while Commissioner Libbin withheld voting in favor of the
recommendation until such time the Tenant was able to provide a business plan for the re-opening
of the restaurant.
In the meantime,the Tenant is working on addressing final comments from the Building Department
to obtain approval of its plans to relocate the air conditioning units, which it hopes to be able to
coordinate in conjunction with the reconfiguration and relocation of the kitchen exhaust.
At the request of the FCWPC, Tenant has provided the Administration with a preliminary business
4
Redevelopment Agency Memorandum
Penn 17, LLC-Retail Lease Amended Rent Schedule
March 13,2013
Page 5 of 5
plan which proposes that the Leased Premises, when re-opened by July 2013, will house three
individual concepts: an anchor restaurant facing 17th Street, involving the Tenant's relocation of its
Bond Street Restaurant; a celebrity chef late-night fast casual eatery in the center section of the
space; and a lounge/bar in the existing bar area. Since the lounge/bar component is being proposed
to include entertainment,which is not listed main permitted use in the Civic and Convention Center
(CCC) zoning district, a public hearing is required under Section 142-362 of the City Code to
approve such use.
The Administration has reviewed and analyzed the business plan provided by Penn 17, LLC and
based on experience with other restaurant operations in the City and,the tenant's prior experience
with Cooper Avenue, believe the revenue projections may be optimistic.
CONCLUSION AND RECOMMENDATION
Considering that Penn 17, LLC has paid 50% of the January and February 2013 Base Rent and
CAM, and given the length of time required to re-lease the space to a new tenant,the Administration
recommends that the City Commission accept the recommendation of the FCWPC pertaining to the
amended rent schedule(in the manner outlined on the schedule attached as Exhibit"A"hereto), and
further set a public hearing for April 17, 2013, regarding Lessee's proposal to add an entertainment
component to the Leased Premises, and as required by Section 142-362 of the City Code. The
Administration will also continue to closely monitor the lease
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T:\AGENDA\2013\March 13\Penn 17 Retail Lease RDA MEM.doc
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EXHIBIT A
NOTES:
(1)Repayment of remaining Nov/Dec 2012 balance($64,791)
(2)Repayment of July 2012 and August 2012.rent($95,688.00)per
Second Amendment
(3)Repayment of security deposit($47,844)
(4)Repayment of July 2013 through December 2013 deferred rent
($171,106.23)
Penn 17,LLC Rent Schedule
Lease Commencement: October 13,2011 Rent Commencement:April 14,2012
Current Proposed
Lease Year:2 Rent Rent Total Monthly Total Monthly
Base Rent Repayment CAM Abatement Deferment Payment Payment
01/13/13 $ 47,843.75 $ - $ 8,474.00 $ (28,158.88) $ - $ 56,317.75 $ 28,158.87
02/13/13 $ 47,843.75 $ - $ 8,474.00 $ (28,158.88) $ - $ 56,317.75 $ 28,158.87
03/13/13 $ 47,843.75 $ - $ 8,474.00 $ (28,158.88) $ - $ 56,317.75 $ 28,158.87
04/13/13 $ 47,843.75 $ - $ 8,474.00 $ (28,158.88) $ - $ 56,317.75 $ 28,158.87
05/13/13 $ 47,843.75 $ - $ 8,474.00 $ (28,158.88) $ - $ 56,317.75 $ 28,158.87
06/13/13 $ 47,843.75 $ - $ 8,474.00 $ (28,158.88) $ - $ 56,317.75 $ 28,158.87
07/13/13 $ 47,843.75 $ - $ 8,474.00 $ - $ (28,158.88) $ 56,317.75 $ 28,158.87
08/13/13 $ 47,843.75 $ - $ 8,474.00 $ - $ (28,158.88) $ 56,317.75 $ 28,158.87
09/13/13 $ 47,843.75 $ - $ 8,474.00 $ - $ (28,158.88) $ 56,317.75 $ 28,158.87
Total: $ 430,593.75 $ - $ 76,266.00 $ (168,953.28) $ (84,476.64) $ 506,859.75 $ 253,429.83
Current Proposed
Lease Year:3 Rent Rent Total Monthly Total Monthly
Base Rent Repayment(1 and 2) CAM Abatement Deferment Payment -Payment
10/13/13 $ 49,279.06 $ 2,658.00 $ 8,474.00 $ - $ (28,876.53) $ 60,411.06 $ 31,534.53
11/13/13 $ 49,279.06 $ 2,658.00 $ 8,474.00 $ - $ (28,876.53) $ 60,411.06 $ 31,534.53
12/13/13 $ 49,279.06 $ 2,658.00 $ 8,474.00 $ - $ (28,876.53) $ 60,411.06 $ 31,534.53
01/13/14 $ 49,279.06 $ 8,057.00 $ 8,474.00 $ - $ - $ 65,810.06 $ 65,810.06
02/13/14 $ 49,279.06 $ 8,057.00 $ 8,474.00 $ - $ - $ 65,810.06 $ 65,810.06
03/13/14 $ 49,279.06 $ 8,057.00 $ 8,474.00 $ - $ - $ 65,810.06 $ 65,810.06
04/13/14 $ 49,279.06 $ 8,057.00 $ 8,474.00 $ - $ - $ 65,810.06 $ 65,810.06
05/13/14 $ 49,279.06 $ 8,057.00 $ 8,474.00 $ - $ - $ 65,810.06 $ 65,810.06
06/13/14 $ 49,279.06 $ 8,057.00 $ 8,474.00 $ - $ - $ 65,810.06 $ 65,810.06
07/13/14 $ 49,279.06 $ 8,057.00 $ 8,474.00 $ - $ - $ 65,810.06 $ 65,810.06
08/13/14 $ 49,279.06 $ 8,057.00 $ 8,474.00 $ - $ - $ 65,810.06 $ 65,810.06
09/13/14 $ 49,279.06 $ 8,057.00 $ 8,474.00 $ - $ - $ 65,810.06 $ 65,810.06
Total: $ 591,348.72 $ 80,487.00 $ 101,688.00 $ - $ (86,629.59) $ 773,523.72 $ 686,894.13
Current- .- .-Proposed
Lease Year:4 Rent Rent Total Monthly Total Monthly
Base Rent Repayment(1 and 2) CAM Abatement Deferment Payment Payment
10/13/14 $ 50,757.43 $ 8,057.00 $ 8,474.00 $ - $ - $ 67,288.43 $ 67,288.43
11/13/14 $ 50,757.43 $ 8,057.00 $ 8,474.00 $ - $ - $ 67,288.43 $ 67,288.43
12/13/14 $ 50,757.43 $ 8,057.00 $ 8,474.00 $ - $ - $ 67,288.43 $ 67,288.43
01/13/15 $ 50,757.43 $ 2,658.00 $ 8,474.00 $ - $ - $ 61,889.43 $ 61,889.43
02/13/15 $ 50,757.43 $ 2,658.00 $ 8,474.00 $ - $ - $ 61,889.43 $ 61,889.43
03/13/15 $ 50,757.43 $ 2,658.00 $ 8,474.00 $ - $ - $ 61;889.43 $' - 61,889.43
04/13/15 $ 50,757.43 $ 2,658.00 $ 8,474.00 $ - $ - $ 61,889.43 $ 61,889.43
05/13/15 $ 50,757.43 $ 2,658.00 $ 8,474.00 $ - $ - $ 61,889.43 $ 61,889.43
06/13/15 $ 50,757.43 $ 2,658.00 $ 8,474.00 $ - $ - $ 61,889.43 $ 61,889.43
07/13/15 $ 50,757.43 $ 2,658.00 $ 8,474.00 $ - $ - $ 61,889.43 $ 61,889.43
08/13/15 $ 50,757.43 $ 2,658.00 $ 8,474.00 $ - $ - $ 61,889.43 $ 61,889.43
09/13/15 $ 50,757.43 $ 2,658.00 $ 8,474.00 $ - $ - $ 61,889.43 $ 61,889.43
Total: $ 609,089.16 $ 48,093.00 $ 101,688.00 $ - $ - $ 758,870.16$... 758,870.16
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EXHIBIT A
NOTES:
(1)Repayment of remaining Nov/Dec 2012 balance($64,791)
(2)Repayment of July 2012 and August 2012 rent($95,688.00)per
Second Amendment
(3)Repayment of security deposit($47,844)
(4)Repayment of July 2013 through December 2013 deferred rent
($171,106.23)
Penn 17,LLC Rent Schedule
Lease Commencement: October 13,2011 Rent Commencement:April 14,2012
Current Proposed
Lease Year:5 Rent Rent Total Monthly Total Monthly
Base Rent Repayment(2 and 3) CAM Abatement Deferment Payment Payment
10/13/15 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15 $ 67,399.15
11/13/15 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15 $ 67,399.15
12/13/15 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15 $ 67,399.15
01/13/16 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15--$--- 67,399.15
02/13/16 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15 $ 67,399.15
03/13/16 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15 $ 67,399.15
04/13/16 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15 $ 67,399.15
05/13/16 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15 $ 67,399.15
06/13/16 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15 $ 67,399.15
07/13/16 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15 $ 67,399.15
08/13/16 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15 $ 67,399.15
09/13/16 $ 52,280.15 $ 6,645.00 $ 8,474.00 $ - $ - $ 63,412.15 $ 67,399.15
Total: $ 627,361.80 $ 79,740.00 $ 101,688.00 $ - $ - $ 760,945.80 $ 808,789.80
Current Proposed
Lease Year:6 Rent Rent Total Monthly Total Monthly
Base Rent Repayment(4) CAM Abatement Deferment Payment Payment
10/13/16 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62,322.56 $ 69,451.99
11/13/16 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62,322.56._$.._ 69,451.99
12/13/16 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62,322.56 $ 69,451.99
01/13/17 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62,322.56 $ 69,451.99
02/13/17 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62,322.56 $ 69,451.99
03/13/17 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62,322.56 $ 69,451.99
04/13/17 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62,322.56 $ 69,451.99
05/13/17 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62,322.56 $ 69,451.99
06/13/17 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62,322.56 $ 69,451.99
07/13/17 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62;322.56 $ 69,451.99
08/13/17 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62,322.56 $ 69,451.99
09/13/17 $ 53,848.56 $ 7,129.43 $ 8,474.00 $ - $ - $ 62,322.56 $ 69,451.99
Total: $ 646,182.72 $ 85,553.16 $ 101,688.00 $ - $ - $ 747,870.72 $ 833,423.88
Current Proposed
Lease Year:7 Rent Rent Total Monthly Total Monthly
Base Rent Repayment(4) CAM Abatement Deferment Payment Payment
10/13/17 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ 63,938.02 $ 71,067.45
11/13/17 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ 63,938.02 $ 71,067.45
12/13/17 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ 63,938.02 $ 71,067.45
01/13/18 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ 63,938.02 $ 71,067.45
02/13/18 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ 63,938.02 $ 71,067.45
03/13/18 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ 63,938.02 $ 71,067.45
04/13/18 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ 63,938.02 $ 71,067.45
05/13/18 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ -63;938:02 $ - 71,067.45
06/13/18 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ 63,938.02 $ 71,067.45
07/13/18 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ 63,938.02 $ 71,067.45
08/13/18 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ 63,938.02 $ 71,067.45
09/13/18 $ 55,464.02 $ 7,129.43 $ 8,474.00 $ - $ - $ 63,938.02 $ 71,067.45
Total: $ 665,568.24 $ 85,553.16 $ 101,688.00 $ - $ - $ 767,256.24 $ 852,809.40
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