96-21884 RESO
RESOLUTION NO.
96-21884
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA AUTHORIZING AND DIRECTING
THE MAYOR AND CITY CLERK TO EXECUTE THE ATTACHED
FOURTH AMENDMENT TO THAT CERTAIN LETTER OF INTENT BY
AND BETWEEN THE MIAMI BEACH REDEVELOPMENT AGENCY, THE
CITY OF MIAMI BEACH, FLORIDA, ST. MORITZ HOTEL
CORPORATION AND LOEWS HOTELS HOLDING CORPORATION,
PERTAINING TO THE DEVELOPMENT OF A CONVENTION CENTER
HOTEL AND PUBLIC PARKING GARAGE, EXTENDING THE DATE FOR
EXECUTION OF THE AGREEMENTS AND INCREASING THE AGENCY'S
POTENTIAL LIABILITY.
WHEREAS, S1. Moritz Hotel Corporation ("SMHC") was the winning bidder in response
to the Convention Center Hotel Request for Proposals; and
WHEREAS, the Miami Beach Redevelopment Agency (the "RDA"), the City of Miami
Beach, Florida (the "City"), SMHC and Loews Hotels Holding Corporation ("LHHC") executed a
Letter of Intent (the "LOI") pertaining to, among other things, the development of an approximately
800 room hotel (the "Hotel") at and near 16th Street east of Collins Avenue, Miami Beach and an
approximately 800 car public garage (the "Garage") at or near 16th Street between Collins and
W ashington Avenues, Miami Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
WHEREAS, the LOI originally provided, among other things, that if the agreements for the
development of the Hotel and Garage and related matters were not executed by the RDA and SMHC
prior to December 15, 1995, the RDA may be responsible to reimburse SMHC for certain design
expenses for the development of the Hotel and the Garage; and
WHEREAS, the RDA, the City, SMHC and LHHC executed certain amendments to the
LOI, extending, among other things, the date referenced in the preceding paragraph; and
WHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank financing and property acquisition, the
RDA, the City, SMHC and LHHC would like to execute the attached Fourth Amendment to the LOI
to, among other things, extend to July 31, 1996 the date by which the agreements must be executed
and when liability for reimbursement of design expenses might apply; and
WHEREAS, SMHC is continuing to incur certain design expenses regarding the Hotel and
has requested an increase in the Agency's potential liability; and
WHEREAS, Section 12(h) of the LOI, as amended, provides that the LOI, as amended, may
be modified by a written agreement executed by both of SMHC and the RDA.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA as follows:
1. The Mayor and City Clerk are authorized and directed to execute the attached Fourth
Amendment to that certain Letter of Intent by and between the Miami Beach Redevelopment
Agency, the City of Miami Beach, Florida, St. Moritz Hotel Corporation and Loews Hotels Holding
Corporation.
2. This Resolution shall take effect immediately upon its passage.
PASSED AND ADOPTED this 7th day of
February
,1996.
RoW- P QA.~
CITY CLERK
ATTEST:
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FORM APPROVED
lE~lp~~T.
BY1Jt~
Date 1. - 5" ~ '?b
2
CITY OF
MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
TO:
FROM:
SUBJECT:
COMMISSION MEMORANDUM NO. ~ 1-q I.n
Mayor Seymour Gelber and
Members of the City Commission
DATE: February 7, 1996
~: ::-:'ed""a /J/
i :.
A RESOLUT~N OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING AND
DIRECTING THE MAYOR AND CITY CLERK TO EXECUTE THE
ATTACHED FOURTH AMENDMENT TO THAT CERTAIN LETTER OF
INTENT BY AND BETWEEN THE MIAMI BEACH REDEVELOPMENT
AGENCY, THE CITY OF MIAMI BEACH, FLORIDA, ST. MORITZ
HOTEL CORPORATION AND LOEWS HOTELS HOLDING
CORPORATION, PERTAINING TO THE DEVELOPMENT OF A
CONVENTION CENTER HOTEL AND PARKING GARAGE, EXTENDING
THE DATE FOR EXECUTION OF THE AGREEMENTS AND
INCREASING THE AMOUNT OF THE AGENCY'S POTENTIAL
LIABILITY.
RECOMMENDATION:
Approve the Resolution.
BACKGROUND:
The negotiations with Loews for the convention hotel have
proceeded in a positive and orderly manner. Since the signing
of the Letter of Intent, a number of major milestones have
occurred. The timing of the negotiations, while somewhat longer
than discussed, has proceeded with deliberate objectives. Most
importantly, a conscious decision was made to have the City's
team draft all documents, putting us in a proactive rather than
reactive position.
The strategy also involved negotiating and achieving agreement
on business terms before critical documents were drafted.
1
AGENDA ITEM
R1B
r-rl-q~
DATE
The ground lease, unique in its complexity, has required
negotiations on a paragraph by paragraph basis. At over 130
pages, it was the most critical document because it spans the
full term of 99 years and also set the tone for the Hotel
Development Agreement, the Garage Development Agreement and
numerous other side agreements which will be entered into.
In December, a major negotiating meeting was held in New York,
during which the entire ground lease was covered, leaving less
than twenty outstanding issues. Subsequent telephone
conferences have narrowed that list significantly, and a major
negotiation session of January 22 through 24, 1996, settled most
remaining issues and made major inroads into the Hotel
Development Agreement.
An additional marathon negotiating session is scheduled for mid-
to-late February to complete the hotel development agreement,
garage development agreement and to make major progress in other
documents.
ANALYSIS:
1. STATUS OF DOCUMENTS
The City's Negotiating Team and Administration's objective
has been to aggressively pursue closure to the documents.
Notwithstanding this, the City's position, while anxious to
meet time deadlines, is that we must be satisfied that the
documents adequately protect the City's interest. It is
anticipated by all parties that documents can be completed
by mid-April, so that we can close when all aspects of the
project have been concluded to the City's satisfaction.
2 . GMP
A second controlling factor in this initiative has been
introduced by the securing of financing. As a condition of
closure, the banks are requiring a guaranteed maximum price
(GMP) contract from the general contractor which is not
unusual. This is prudent and protects the city as well as
Loews. Given the need to rework plans, Loews projects the
lock-in date to be May 1, 1996. Loews cannot meet the
2
bank's requirements until the GMP is secured. The
Negotiating Team believes that the May 1st date is
optimistic and will be pursued. This would allow an
extension of closing to May 24, 1996, to accommodate the
public hearing process.
3. EISENBERG LAWSUIT
The third controlling factor is the timing of settlement of
the Eisenberg lawsuit which is of critical importance to
Loews and the Banks. The City's legal advisors are aiming
for settling the case by mid-April.
4. Finally, several other cleanup actions on the part of the
City remain which must be dealt with prior to closing,
including:
a) An agreement by Dade County to waive County impact
fees. A meeting must be set up with County Commission
Chairman Arthur Teele, Jonathan Tisch, the Mayor and
the City Manager to discuss this. Follow-up action
must be taken by the County Commission. Resolution of
this issue will take at least one month after an
initial meeting occurs, due to County agenda schedules
which further emphasizes the need for a meeting at the
earliest possible date.
b) Eminent domain proceedings must move forward to
acquire the privately owned parcels needed for the
garage site. The City Attorney's Office has elected
to utilize the County Attorney's Office as its outside
counsel. This process will also take at least two
months to resolve.
Due to the time the City needs to implement its actions, the
above factors all combine to require a reasonable extension of
the L. O. I . The Negotiating Team suggests that only one
extension occur and henceforth is recommending an extension to
July 31, 1996 as the outside date; with full and mutual
expectation that a closing can realistically occur by the end of
May, 1996. The Commission must bear in mind that this cannot
happen until the City resolves its responsibilities.
3
Because Loews has incurred the significant liability of
architectural drawings, legal fees, bank fees and other numerous
costs, it is the recommendation of the Negotiating Team that the
liability cap be increased from $1.6 million to $3.8 million,
commensurate with Loews additional outlays for architectural and
engineering fees.
CONCLUSION
There is no doubt that significant and meaningful commitments
have been made since the signing of the original Letter of
Intent.
. The developer has laid out over $3 million (soon to reach
$3.8 million) for architectural and engineering services.
. The developer has diligently pursued and obtained design
review approval for the hotel and garage.
. The developer has participated in good-faith negotiations,
resulting in closure on 90% of issues in the major critical
documents.
. The developer has paid out substantial amounts in bank fees
to obtain financing commitments.
. The developer has engaged in an aggressive marketing and
pre-booking effort, resulting in hundreds of thousands of
room nights committed.
. Many of these activities on the part of the developer were
done voluntarily at this time because of the developer's
desire to meet the City's need to obtain a convention hotel
at the earliest possible date. The Negotiating Team
recognizes that any liability to be paid on the part of the
City can only occur if the City defaults, which, hopefully,
will not be the case.
. As a result of this progress, the project can break ground
shortly after closing, resulting in a construction start
twelve months earlier than normally possible if the
developer had not taken the risk to proceed with drawings.
4
The Negotiating Team wishes to emphasize that, while it is aware
of time constraints, the Agency must know that the Negotiating
team will not sacrifice safety of the City's position or
compromise quality.
The RDA should approve the Resolution.
JGP:HSM/jph
5
RESOLUTION NO. 232-96
A RESOLUTION OF THE CHAIRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT AGENCY AUTHORIZING AND DIRECTING
THE CHAIRMAN AND SECRETARY TO EXECUTE THE ATTACHED
FOURTH AMENDMENT TO THAT CERTAIN LEITER OF INTENT BY
AND BETWEEN THE MIAMI BEACH REDEVELOPMENT AGENCY, THE
CITY OF MIAMI BEACH, FLORIDA, ST. MORITZ HOTEL
CORPORATION AND LOEWS HOTELS HOLDING CORPORATION,
PERT AINING TO THE DEVELOPMENT OF A CONVENTION CENTER
HOTEL AND PUBLIC PARKING GARAGE, EXTENDING THE DATE FOR
EXECUTION OF THE AGREEMENTS AND INCREASING THE AGENCY'S
POTENTIAL LIABILITY.
WHEREAS, St. Moritz Hotel Corporation ("SMHC") was the winning bidder in response
to the Convention Center Hotel Request for Proposals; and
WHEREAS, the Miami Beach Redevelopment Agency (the "RDA"), the City of Miami
Beach, Florida (the "City"), SMHC and Loews Hotels Holding Corporation ("LHHC") executed a
Letter oflntent (the "LOI") pertaining to, among other things, the development of an approximately
800 room hotel (the "Hotel") at and near 16th Street east of Collins Avenue, Miami Beach and an
approximately 800 car public garage (the "Garage") at or near 16th Street between Collins and
W ashington Avenues, Miami Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
WHEREAS, the LOI originally provided, among other things, that if the agreements for the
development of the Hotel and Garage and related matters were not executed by the RDA and SMHC
prior to December 15, 1995, the RDA may be responsible to reimburse SMHC for certain design
expenses for the development of the Hotel and the Garage; and
WHEREAS, the RDA, the City, SMHC and LHHC executed certain amendments to the
LOI, extending, among other things, the date referenced in the preceding paragraph; and
WHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank fmancing and property acquisition, the
RDA, the City, SMHC and LHHC would like to execute the attached Fourth Amendment to the LOI
to, among other things, extend to July 31, 1996 the date by which the agreements must be executed
and when liability for reimbursement of design expenses might apply; and
WHEREAS, SMHC is continuing to incur certain design expenses regarding the Hotel and
has requested an increase in the Agency's potential liability; and
WHEREAS, Section 12(h) of the LO!, as amended, provides that the LO!, as amended, may
be modified by a written agreement executed by both of SMHC and the RDA.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CHAIRMAN AND
MEMBERS OF THE MIAMI BEACH REDEVELOPMENT AGENCY as follows:
1. The Chairman and Secretary are authorized and directed to execute the attached
Fourth Amendment to that certain Letter ofIntent by and between the Miami Beach Redevelopment
Agency, the City of Miami Beach, Florida, St. Moritz Hotel Corporation and Loews Hotels Holding
Corporation.
2. This Resolution shall take effect immediately upon its passage.
PASSED AND ADOPTED this 7th day of
, 1996.
ATTEST:
~l)(,.wr p~
SECRETARY
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c:\wpwin60\resos\4amdagmt.rda
FORM APPROVED
REDEVElOPMENT AGENCY
GEN~ }fA'.NS~!- .
By /fI!~
Date 3-(;' 96
2
Miami Beach
Redevelopment Agency
1700 Convention Center Drive
Miami Beach, Florida 33139
Telephone: (305) 673-7193
Fax: (305) 673-7772
DATE:
TO:
FROM:
SUBJECT:
REDEVELOPMENT AGENCY MEMORANDUM NO. 96-6
February 7, 1996
Chairman and Members of the Board
of the Redevelopment Agency
Jose Garcia-Pedrosa 11
Executi ve Directorm
A RESOLUTION OF THE';:~~IRMAN AND MEMBERS OF THE MIAMI
BEACH REDEVELOPMENT {GENCY AUTHORIZING AND DIRECTING THE
CHAIRMAN AND SECRETARY TO EXECUTE THE ATTACHED FOURTH
AMENDMENT TO THAT CERTAIN LETTER OF INTENT BY AND BETWEEN
THE MIAMI BEACH REDEVELOPMENT AGENCY, THE CITY OF MIAMI
BEACH, FLORIDA, ST. MORITZ HOTEL CORPORATION AND LOEKS
HOTELS HOLDING CORPORATION, PERTAINING TO THE DEVELOPMENT
OF A CONVENTION CENTER HOTEL AND PARKING GARAGE,
EXTENDING THE DATE FOR EXECUTION OF THE AGREEMENTS AND
INCREASING THE AMOUNT OF THE AGENCY'S POTENTIAL
LIABILITY.
RECOMMENDATION:
Approve the Resolution.
BACKGROUND:
The negotiations with Loews for the convention hotel have proceeded
in a positive and orderly manner. Since the signing of the Letter
of Intent, a number of major milestones have occurred. The timing
of the negotiations, while somewhat longer than discussed, has
proceeded with deliberate objectives. Most importantly, a
conscious decision was made to have the City's team draft all
documents, putting us in a proactive rather than reactive position.
The strategy also involved negotiating and achieving agreement on
business terms before critical documents were drafted.
1
S()UTIi V()I~
Dedevel()pment Ulstl1l:t
CI"O' CI:~V
Vedevel()pment Ulstril:t
AGENDA ITEM 2-A
t:"o}-,...."",....,,; 1 QQj::;
The ground lease, unique in its complexity, has required
negotiations on a paragraph by paragraph basis. At over 130 pages,
it was the most critical document because it spans the full term of
99 years and also set the tone for the Hotel Development Agreement,
the Garage Development Agreement and numerous other side agreements
which will be entered into.
In December, a major negotiating meeting was held in New York,
during which the entire ground lease was covered, leaving less than
twenty outstanding issues. Subsequent telephone conferences have
narrowed that list significantly, and a major negotiation session
of January 22 through 24, 1996, settled most remaining issues and
made major inroads into the Hotel Development Agreement.
An additional marathon negotiating session is scheduled for mid-to-
late February to complete the hotel development agreement, garage
development agreement and to make major progress in other
documents.
ANALYSIS:
1 . STATUS OF DOCUMENTS
The City's Negotiating Team and Administration's objective has
been to aggressively pursue closure to the documents.
Notwithstanding this, the City'S position, while anxious to
meet time deadlines, is that we must be satisfied that the
documents adequately protect the City's interest. It is
anticipated by all parties that documents can be completed by
mid-April, so that we can close when all aspects of the
project have been concluded to the City'S satisfaction.
2. GMP
A second controlling factor in this initiative has been
introduced by the securing of financing. As a condition of
closure, the banks are requiring a guaranteed maximum price
(GMP) contract from the general contractor which is not
unusual. This is prudent and protects the city as well as
Loews. Given the need to rework plans, Loews projects the
lock-in date to be May 1, 1996. Loews cannot meet the bank's
2
requirements until the GMP is secured. The Negotiating Team
believes that the May 1st date is optimistic and will be
pursued. This would allow an extension of closing to May 24,
1996, to accommodate the public hearing process.
3. EISENBERG LAWSUIT
The third controlling factor is the timing of settlement of
the Eisenberg lawsuit which is of critical importance to Loews
and the Banks. The City's legal advisors are aiming for
settling the case by mid-April.
4. Finally, several other cleanup actions on the part of the City
remain which must be dealt with prior to closing, including:
a) An agreement by Dade County to waive County impact fees.
A meeting must be set up with County Commission Chairman
Arthur Teele, Jonathan Tisch, the Mayor and the City
Manager to discuss this. Follow-up action must be taken
by the County Commission. Resolution of this issue will
take at least one month after an initial meeting occurs,
due to County agenda schedules which further emphasizes
the need for a meeting at the earliest possible date.
b) Eminent domain proceedings must move forward to acquire
the privately owned parcels needed for the garage site.
The City Attorney's Office has elected to utilize the
County Attorney's Office as its outside counsel. This
process will also take at least two months to resolve.
Due to the time the City needs to implement its actions, the above
factors all combine to require a reasonable extension of the L.O.I.
The Negotiating Team suggests that only one extension occur and
henceforth is recommending an extension to July 31, 1996 as the
outside date; with full and mutual expectation that a closing can
realistically occur by the end of May, 1996. The Agency must bear
in mind that this cannot happen until the City resolves its
responsibilities.
Because Loews has incurred the significant liability of
architectural drawings, legal fees, bank fees and other numerous
costs, it is the recommendation of the Negotiating Team that the
liability cap be increased from $1.6 million to $3.8 million,
3
commensurate with Loews additional outlays for architectural and
engineering fees.
CONCLUSION
There is no doubt that significant and meaningful commitments have
been made since the signing of the original Letter of Intent.
. The developer has laid out over $3 million (soon to reach $3.8
million) for architectural and engineering services.
. The developer has diligently pursued and obtained design
review approval for the hotel and garage.
. The developer has participated in good-faith negotiations,
resulting in closure on 90% of issues in the major critical
documents.
. The developer has paid out substantial amounts in bank fees to
obtain financing commitments.
. The developer has engaged in an aggressive marketing and pre-
booking effort, resulting in hundreds of thousands of room
nights committed.
. Many of these activities on the part of the developer were
done voluntarily at this time because of the developer's
desire to meet the City's need to obtain a convention hotel at
the earliest possible date. The Negotiating Team recognizes
that any liability to be paid on the part of the City can only
occur if the City defaults, which, hopefully, will not be the
case.
. As a result of this progress, the project can break ground
shortly after closing, resulting in a construction start
twelve months earlier than normally possible if the developer
had not taken the risk to proceed with drawings.
The Negotiating Team wishes to emphasize that, while it is aware of
time constraints, the Agency must know that the Negotiating team
will not sacrifice safety of the City's position or compromise
quality.
4
The RDA should approve the Resolution.
JGP:HSM/jph
5
FOURTH AMENDMENT
This is a Fourth Amendment (the "Fourth Amendment" ), dated as of February 7, 1996, to
that certain Letter ofIntent (the "LOI"), dated as of May 3, 1995, a copy of which is attached hereto
as Exhibit "A" and incorporated herein, as amended by that certain Amendment to the LOI (the
"Amendment"), dated as of December 6, 1995, a copy of which is attached hereto as Exhibit"B" and
incorporated herein, as further amended by that certain Second Amendment to the LOI (the "Second
Amendment"), dated as of January 10, 1996, a copy of which is attached hereto as Exhibit "C" and
incorporated herein, and as further amended by that certain Third Amendment to the LOI (the "Third
Amendment"), dated as of January 24, 1996, a copy of which is attached hereto as Exhibit "D" and
incorporated herein. The Fourth Amendment, the Third Amendment, the Second Amendment, the
Amendment and the LOI are by and between the Miami Beach Redevelopment Agency, a public
body corporate and politic (the "RDA"); the City of Miami Beach, Florida, a Florida municipal
corporation (the "City"); St. Moritz Hotel Corporation, a Florida corporation ("SMHC"); and Loews
Hotels Holding Corporation, a Delaware corporation ("LHHC"). The LOI, as amended by the Third
Amendment, the Second Amendment and the Amendment, is referred to herein as the "LOI, as
amended. "
RECITALS
WHEREAS, SMHC was the winning bidder in response to the Convention Center Hotel
Request for Proposals; and
WHEREAS, the RDA, the City, SMHC and LHHC executed the LOI, pertaining to, among
other things, the development of an approximately 800 room hotel (the "Hotel") at and near 16th
Street east of Collins Avenue, Miami Beach and an approximately 800 car public garage (the
"Garage") to be located at or near 16th Street between Collins and Washington Avenues, Miami
Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
WHEREAS, the LOI originally provided, among other things, that if the agreements for the
development of the Hotel and Garage and related matters were not executed by the RDA and SMHC
prior to December 15, 1995, the RDA may be responsible to reimburse SMHC for certain design
expenses for the development of the Hotel and the Garage; and
WHEREAS, the RDA, the City, SMHC and LHHC executed the Amendment, the Second
Amendment and the Third Amendment, extending, among other things, the date referenced in the
preceding paragraph; and
WHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank financing and property acquisition, the
RDA, the City, SMHC and LHHC would like to amend the LOI, as amended, to extend further the
time by which agreements must be executed and liability for reimbursement of design expenses
might apply; and
WHEREAS, SMHC is continuing to incur certain design expenses regarding the Hotel; and
WHEREAS, Paragraph 12(h) of the LOI, as amended, provides that the LOI, as amended,
may be modified by a written agreement executed by both of SMHC and the RDA.
NOW THEREFORE, in exchange for the mutual promises contained herein, and other
good and valuable consideration, the receipt and adequacy of which is hereby conclusively
acknowledged, the parties agree as follows:
1. ABOVE RECITALS.
The above recitals are true and correct and are incorporated as a part of this
Fourth Amendment.
2. MODIFICATIONS.
a) Paragraph 11 of the LOI, as amended, entitled "Design Development Expense
Reimbursement", is changed as follows (underlines indicate additions; strike-outs indicate deletions):
11. Design Development Expense Reimbursement
The parties acknowledge that SMHC will, of necessity, incur significant out-
of-pocket costs for professional architectural design, engineering and other technical
advice and services in connection with the design, construction and permitting of the
Hotel ("Design Costs") prior to the execution of the Agreements. In consideration
of the foregoing, and in order to insure the timely consummation of the transactions
contemplated hereby, SMHC and the Agency have agreed that such costs will be
subject to reimbursement as follows:
(a) if the Agency or the City, as applicable, has not, prior to Fehm8.l)' 8, 1996
July 31. 1996, entered into binding agreements to raise the funds necessary to meet
its obligations as contemplated by Paragraph 2(b)(3) and Paragraphs 3(a) and (b),
then the Agency shall, no later than Fehf'lifl:lY 22, 1996 Au(:ust 14. 1996, pay to
SMHC the Qualified Design Costs (as hereinafter defined). U'pon submission by
SMHC to the AGency of written documentation verifyini: that such Qualified DesiGn
Costs have been incurred;
2
(b) if SMHC has not by FehrtttUy 8, 1996 July 31. 1996 entered into binding
financial commitments to obtain the first mortgage financing as contemplated by
Paragraph 2(b)(1), SMHC shall bear all Design Costs incurred by it; and
(c) if the Agreements are not in final form acceptable to the parties for execution
by Fehrutll'Y 8, 1996 July 31. 1996, for any reason whatsoever, including the mutual
failure ofSMHC and the Agency (or the City, as the case may be) to obtain financing
commitments pursuant to (a) and (b) above, SMHC shall bear one half of the
Qualified Design Costs and the Agency shall, no later than Fehrtlfll)' 22, 1996 AUiust
14. 1996, reimburse SMHC for one half of the Qualified Design Costs. upon
submission by SMHC to the A~ency of written documentation verifyin(: that such
Qualified Desi~n Costs have been incurred.
The term "Qualified Design Costs" shall mean Design Costs in an amount not to
exceed $1,600,000, $3.800.000.; proo/idea, hO"ft'(;ver, Hurt ifhetween July 15, 1995
tmd August 1, 1995 the Ageney notifies SMIIC that it wishes SMIIC to suslKnd
further design work, Qualified Design C6sts shall ft6t exceed $1,000,000.
b) Paragraph 12(f) of the LOI, as amended, entitled "Termination" is modified
as follows:
The reference to "February 8,1996" is changed to "July 31,1996."
3. OTHER PROVISIONS.
The other provisions of the LOI, as amended, are unchanged.
4. RATIFICATION.
The RDA, the City, SMHC and LHHC ratify their agreement with the terms
of the LOI, as amended, as modified by this Fourth Amendment.
5. GOVERNING LAW.
This Fourth Amendment shall be governed by and construed in accordance
with the laws of the State of Florida, without reference to principles of conflict of laws.
6. HEADINGS.
Headings in this Fourth Amendment are only for convenience, are not a
substantive part of this Fourth Amendment or the LOI, as amended, and do not affect the meaning
of any provision of this Fourth Amendment or the LOI, as amended.
3
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to be
executed by their appropriate officials.
ATTEST:
(<~tw.~ p~
By:
Robert Parcher, Secretary
Date: ~
ATTEST:
ReW ~~
Robert Parcher, City Clerk
Date: J '!11.
By:
ATTEST: -\' '. "\'
. "l
By: ) 'lJ~/ (~
/ !
Gary w. Garson, Esq.
Print Name
Date: February 13, 1996
By:
Gary w. Garson, Esq.
Print Name
Date: February 13, 1996
AlT: kw:c:wpwin60\ait\smhclhhc,4am
Gelber, Chairm~DEVELOPMENT AGENPV
GENERAL COUNSEL
By 11; f1~
APPROVED
lEGA~T
By '1w ..d. -
ST. MORITZ HOTEL CORPORATION Date
Date:
By:
Date:
By:
ck s. Adler Vice president
Print Name and Title
Date: February 13, 1996
LOEWS HOTELS HOLDING CORPORATION
By:
ac S. Adler 0 P-
.nt Name and Title
Date: February 13, 1996
4
. ,
" \
LE'M"ER OF ~
May.3., 1995
Re: Loe~g ~ami Beach Hotel
In February 1993, the City center/Hiscoric Convention Village
Redevelopment and Revitalizacion Area was officially established by
the adoption of a Redevelopment Plan (the "Redevelopment Plan").
The Redevelopment plan was the result of the combined effort of. the
City of Miami Beach (the .City.), Miami Beach Redevelopment Agency
(the "Agency"), Metropolitan Dade County and the State of Florida.
The Redevelooment Plan.reoresents the effort and commitment of the
Agency and the City to foster the developmenc of convention quality
hotels, ancillary improvements and facilities. and necessary
linkages to the Convention Center. Pursuant to this Plan, the
Agency has acquired the land, k.."1own as site I-A, which it has
agreed to make available for a convention headquarters hotel which
w2J.J. serve as the cornerstone of the Redevelopment Plan.
In furtherance of the Redevelopment plan, the City published
a Request for Proposal (-RFp.) dated November 29, 1993.
In a resolution dated July 21, 1994, after a public ~eview
process, the Agency selected St. Moritz Hotel Corp. ("SMHC-) from
among the groups which submitted proposals pursuant: to the REP and
directed representatives of the AgenCY to negotiate the terms under
which SMRC would develop, c~:>nstruct, own and operate the convention
headquarters hotel referred to alx>ve (the -Hotel-) in accord.ance
wi.t:h the requirements of the RFP. This letter sets forth the
understanding reached as a result: of such negotiations.
~. The Hot:el
The Hotel will be an. approximacely soa-room headquarters
convention hotel to be constructed on Site I-A described in the
RFP. The Hotel will be a first class, upsca~e property with
suitable convention, conference and meeting space and appropriate
amenities meeting the standards of the Loews Hotel chain and those
standards set forth in the Ground Lease (as hereinafter defined).
It will be developed based upon the concept presented in SMHC'S
response to the RFP, dat:ed March 7, 1994, subject to the definitive
agreements to be entered into between the Agency and/or City (as
applicable) and SMEC (collectively, the "Agreements.), the form and
substance of which shall be acceotable to SMHC's lender, SMHC, the
Ageocy, the City and their respective counsel. SMHC shall be
obligated to develop, construct, furnish and equip t:he Hotel in
accordance with plans established pursuant to the Agreement:s which
sba~l include approximately ~90 on-site parking spaces. The Hotel
shall be cor..structed in accordance wi t:.h all app~icab1e zoning,
00'; C047S..tlOCS"MLU'OL1.SJIQ1OS_D~toer.
1
EXHIBIT -A-
. .
building, environmencal, safecy and other governmental laws, rules
and regulations.
2. ~osts and Financinq of the Hotel
The preliminary estimated budget for the development of the
Hotel, and the financing sources, are as follows:
a . COSTS
~. Hard costs, such as excavation,
construction, building materials,
contractor fees, etc. $ 66,400,000
2. Hotel furniture and equipment 1.9,500,000
3. SOft costs such as architectural and
design fees, consultants, legal
fees, hotel operator technical ser-
vices and pre-opening costs and
services, developer fees, site manage-
ment fees, pre-opening i.nsurance,
and initial working capital 17,600,000
4. Financing costs such as construction
interest, commitment fees, other
bank costs and fees, legal fees,
etc. 6,500.000
Subtotal:
SUO,OOO , 000
6.
Operating deficit guarantee .
Mortgage debt service guarantee
Total:
10,000,000
s.
15,000.000
$135,000,000
00' I to. 75. . DOC:S. tdA110US 1 HEHOS_DIS'DUJIar::cer.
2
b . ~OiJRCES
~.
2.
3.
4.
5.
S 66,000,000
First mortgage
Initial equity provided by SMHC,
which will be funded prior to first
mortgage funding
15,000,000
Agency'S share of project costs
(exclusive of land valued at
$24,000,000 and other Agency and/or
City Actions described below),
which will be funded as described
below
29.000.000
~O.OOO.OOO
Subtotal:
Operating deficit guarantee provided
by SMHC's parent, Loews corporation,
for the benefit of and as required
by first mortgage ~ender
Mortgage debt:: service guarantee
provided by SMHC's parent, LoewS
corporation, for the benefit of and
as required by first mortgage
lender
1.0,000,000
J.5,OOO.000
Sl35. 000 . OOQ.
Total:
c _ FONDING OF AGENcr' S S~
At the time of, or prior to, the execution of the
Agreements. the 1J;;en<:'/ will have taken all action required. by
law to authorize, and will have sold and issued, in the manner
to be set'forth in the Agre~ents, $29,000,000 of bonds or
will have incurred other debt resw.ting in net available funds
of $29,000,000 (which bonds or debt may be restricted to uses
permitted by law. noW or at the t~me of such fundingl. l~ss
the net a,tDOunt of U.S. Department of Housing and Urban
Development section 108 loan proceeds available for
development of the Hotel (which funds the AgenCY shall use its
good faith efforts to obtain. and which funds shall not be
restricted to the construction of the public areas of the
Hotel) .
The Agreements will provide that such funds shall be
disbursed to SMIlC's construction lender on or about the
commencement of construct~on. together w~th SMHC's Funded
EqUity (as hereinafter definedl. and shall be appHed in
accorda=e with appl~cable la"S. The appHcation of funds in
accordance with app1icab1e laws sha11 be supported by
co,: (CKTsa "DOCS.~.OU'JHPCS_O~CIC.
j
appropriate cocumen~atio:"... The public areas of the Ho~el
shall be owned and operated in accordance with all applicable
laws.
3. AgencV and/or City ~ctions
At the time of, or prior to, the execution of the Agreeme~ts,
the Agency a~d/or City, as applicable, will have taken all action
:::-equired by law to authorize, aod will have sold and issued, in the
manner to be set forth in the Agreements, boods in a sufficient
amount, or will have incur::-ed other debt in a sufficient amount, co
ensure thac the following actions will be substantially completed
prior to the opening date of the Hotel as defined in the Hotel
Management Agreement (as hereinafter defined) (the "Hotel OpeIling
Date "). The Agreements will include a timetable commitment for the
completion of these actions as well as a requirement that they be
implemented-in coordination with SMHC.
(a) Municioal Garaae: As provided in Section 4 of this
letter.
(b) Site Imorovements and Broadwalk: The Agency and/or
city shall provide up to $3,000,000 which shall be applied
solely to the cost of legally permissible exterior
improvements to the public areas and public access areas
relating to the Sotel and .to that portion of the construction
of an Agency a:nd/or City owned and maintained exte!1'Sion of the
existing boardwalk or broadwalk (subj ect to applicable
environmental laws) 00 or immediately east of Site I-A.
The Agency and/or City shall also be responsible
maintenance of the beachfront adjacent to the Hotel
construction and maintenance of the boardwalk or broadwalk
2~st st.reet to the northern boundary of Lummus Park.
In addition, the AgeIJCY and/or city shall use good faith
efforts to cause the implemeocation and completion of the
previously planned S~ace of Florida streetscape improvements on
Colli.ns Avenue . (~) from Lincoln Road to l.5th Street and
connecting to Ocean Drive, so that these improvements are completed
prior to the Botel OpeniDg Date. SMHC will work wi tb. the Agency
and/or City in this regard.
for
and
from
The Agency and/or City shaJ.l perform the foregoing actions in
accordance with the standards set forth in the Agreements.
4. Municipal Garaae
(a) Aaencv or City to Build Garage.: The Agency or City
shall be responsible for the construccion and maintenance (for
so long as the land subj ect to the Ground Lease and the
improvements thereon are operated as a hotel or the pa~king
4
DO':(O.7S'.pOCS"~'O~~Sl~S_O~~"
spaces are required for the use of such laod and the
irnpro'lemeots thereon by SI'SC under applicable law) of an
approximately aOO-car muo.icipal garage ("Garage") 00 a City-
owned site within an area bounded by Washington and Col1i~s
Avenues between 15tb and 17th Streets, including extensioo of
~6th Street. leading to the Hotel main ent~ance across Collins
Avenue. The Agency and/or City shall perform the foregoi~g
actions in accordance wit.h the seandards set forth in t~e
Agreements. SMHC shall act as developer of the Garage for a
fee of 3% of the project. cost, plus out.-of-pocket ~xpenses,
pursuant to a development agreement. mutually satisfactory to
the parties. In addition, a..'1.y retail or accessory uses
included in the Garage structure will be compatLble with a..~d
enhance the Hotel and its vicinity in accordance with tee
standards set forth in the Agreements. The Garage will be
completed and ready for use not later than the anticipated
Hotel Opening Date. The Agency and/or City shall not, for so
long as the Hotel is operated as a hotel, increase the height
of the Garage so as to adversely affect the useful enjoyment
of the hotel swimming pool.
(b) Garage eoerator: The Agency or City shall designate
the operator of the Garage, which designee shall be selected
from a list of nationally recognized garage operators mutually
satisfactory to the AgenCY and/or city and SMHC, and which
operator shall be subject to the approval of SMHC.
(c) Sotel Use: Approximately 560 parking spaces shall
be available for priority use (as defined below) by the Hotel
(including provisions for Eotel valet parking arrangements) .
Hotel user parking rates shall be established by the-garage
operator, subject to the Agency'S or city'S approval,
provided, however charges to SMHC for valet parking sball not.
exceed 50% of che self-park race and charges for Hotel
employee parking shall not exceed the lower of (i) lIlOotbly
parking rate, (iil 50% of self-parking race or (iiil contraCC
parking rate. St-{HC shall utilize the available parking spaces
at the Garage prior to utilizing other off-site parking
facilities.
.priority use- shall mean the garage operator shall set
aside solely for Botel use such nuraber of the allocated
parking spaces as Hotel Operator shall request from time to
time upon not less chan 24 hours prior notice to the garage
operator.
(d) Hotel Garacre Rent..: SMHC shall pay annual rent,
payab~e monthly, equa~ to $500,000 for the use of the 560
priority Rotel. parJcing "paces, subject to paragraph (e), below
(the -Garage Rent').
5
DO':(047S'"OOCS.~'011S1~_ot~~.
(e) Facility Usaae Payment: In consideration of S~~C's
agreemenc co utilize che Garage on a requiremencs basis, as
provided above, SMHC shall be paid monthly a percentage of tr:e
annual grOSS revenues of the garage as follows (the Rfacility
Usage payment-), the firsc $500,000 of which shall be applied
as a credit against the Garage Rent each year:
(i) 41.7% of annual gross revenues with respec: to
the first $1,200,000 of gross revenues; and
(ii) 28% of annual gross revenues in excess of
$1,200,000.
(f) Limitation on Losses: In the event cumulative
Garage Rent payments less the cumulative Facility Usage
Payments made by SMHC exceed $1,000,000, the Facility Usage
Payment will be the greater of $500,000 and the amount
calculated in accordance with subparagraph (e) above.
(g) Street Extension: The City shall extend 16th Street
from Washington Avenue to Collins Avenue.
(h) Enforceability:: Appropriate provision will be made,
by easement or other covenant, to ensure the enforceability of
the Rotel' s rights to the Garage. The Agency will ensure that
the development of so-called phase 5, the area on the north
side of 16th Street, will be compatible with and enhance the
Hotel and its vicinity.
5 _ Ground Lease
The land comprising Site I -A, on which the Hotel will be
constructed, will be leased to SMHC by the Agency pursuant: to a
ground lease (the . Ground Lease.) having the following provisions:
(a) Title: 'the execution of the Agreements by SMHC will
be conditioned upon fee title to the land being satisfactory
to SMHC. After execution of the AgreeJI1ents, the Agency will
not further encumber such title to the land exce'Ot with
respec~ to those "matters (such as utility easements and non-
monetary reciprocal easement: agreements) reasonably approved
by 5MBC and which do not adversely affect the operation or
development of the Botel as called for herein. Title to the
existing improvements on the land will be conveyed to SMHC on
an -as is. basis at the time of execution of the Ground Lea.se.
(b) Terra.: 99 years
$500,000 per year commencing 00. the
Base R~~t shall be increased every 10
Opening Date in the same proportion as
in the then appraised fair market value
(c) Base Rent:
Hotel Opening Date.
years from the Hotel
the increase, if any,
6 '
DO':(047S..DOCS"~'011S1~_D~OK.
of the land (on a vacant and unimproved basis) bears co a base
value of $24,000,000, subject to a cap for each escalation
equal to the applicable change in the GDP implicit price
deflator index. In. no event shall Base Rent during an
escalation period be less than the Base Rent during the prior
period.
(d) Additional Rent: Net Cash Flow after Debt Service
(as hereinafter defined) shall be dis~ributed annually
pursuant to the following Tiers:
Tier 1. 100% to SMEC until funded operating shortfall
reserve (up to ~10 million) plus interest at
15~ per annum as calculated from the later to
occur of the date such amounts are funded and
the Hotel Opening Date (cumulative and
compounded) is repaid.
Tier 2. 100% to SMHC until SMHC receives a 15% .per
annum cumulative (not compounded) preferred
return on the $15 million initial equity as
calculated from the later to occur of the date
such a~oUIlts are funded and the Hotel Opening
Da.te (the "Funded Equity.).
Tier 3. 100% to SMHC as interest at lS~ per annum
cumulative (not compounded) on funds provided
by SMHC to meet development cost overruns,
subject to a cap of $11,000,000, and up to $5
million of additional operating shortfalls, as
calculated from the later to occur of the date
such amounts are funded and the Er6tel. Opening
Date.
Tier 4. 80% to SMHC and 20% to the Agency until SMHC
has (i) received 25% Internal Rate of Return
(as such tertll is defined in the Agreements,
hereinafter referred to as -IRR") (cumulative
and compounded return on and return of), on
its Funded Equity ($15,000,000) as calculated
from the later to occur of the date such
amounts are funded and the Hotel Opening Date,
not: including the shortfall. reserve, actually
funded and (ii) been repaid cost overruns and
operating shortfalls referred to in Tier 3.
Tier 5. 20% to SMEIC and 80% to the Agency until the
Agency has received (as calculated from the
Hocel ope"1,ing Dace and including Base Rent and
Additional Rent actually paid) an 8% IRR
{cumulative and compounded return on and
7
DO'. [047~ "oocs.KI>-1'QUS1~_DI~0II.
.... ~. 4 -,"
return of) ies land at a fixed value of
$24,000,000.
Tier 6.
85% to SMHC. lS~ to the Agency.
(e) Non-Subordination: The Ground Lease will not be
subordinated to the first mortgage or to any other financing
agreements.
(f) Real Estate Taxe~: The Hotel, including the land,
will be subject to ad valorem real escate taxes levied by the
City ~d other governmental authorities in accordance with
law. SMHC will be eati tied co the benefit of any tax
abatements and reductions as are, or may become available
under applicable law, as if it were the fee owner of the la.-,.d.
(g) Environmental Indemnitv: The Agency will provide an
indemnity to SMaC with respect to the remediation, as
described in the AgreementS, of environmental matters
affecting the land and the improvements thereon which exist
prior to the execution of the Ground Lease, except as to those
tnat.ters disclosed to SMHC in the environmental audits provided
to or obtained by SMHC prior to the execucion of the
Agreements.
SMHC will provide an indemnity to the Agency wi ch respect
to the remediat.ion, as described in the Agreements, of
environmental matt.ers affecting the land and the improvement.s
thereon arising from and after the execution of the Ground
Lease and/or relating to the mitigation of the environmental
matters disclosed to SMHC in the environmental audits provided
to or obtained by SMHC prior to the execution of the
Agreements.
No limitations of liability will apply with respect to
the foregoing indemnities.
(h) FinancinCl: Any financing secured by the. Ground
Lease or Hotel, and any refinancings t.hereof, td11 be provided
by institutional financing sources or, subject to the "Deemed
Debt.- provisions herein, an affiliat.e of SMHC. Without
obtaining the Agency's consent, the principal amount of the
initial financing or any refinancing of the Hotel shall not
exceed Deemed Debe, as hereinafter defined~ The Agency will
not be call~d upon to subordinate i1:.s interest under tbe
Ground Lease in connection with any financ.ing or refinancing.
Loews Corporation (or an entity acceptable to the first
mortgage lender (5) and the Agency) sha.J.l furnish a comp1.ecion
guaranty for t.he benef.it of the construction lender and the
Agency.
6
00', t047S..DOCS":aAl'OUSltQClS_D~CII.
(il Pu~chase oation: while the Agency'S Tax Increment
Revenue Bonds, Series 1993 (tl:... "Sands') bave not been
retired, SMHC will have an option to purchase the land at a
price equal to the greater of (11 the then appraised fair
market value of the Agency's interest in the land based upon
an arm'S length sale to a third party buyer not affiliated
with sMHC taking into account the then current state of title
as well as the continued existence of the Ground Lease and the
Hotel Management Agreement as then in effect. or (2) the
amount determined as follows:
a. For all fiscal years until Additional Rent payments
have reached Tier 5: an amount to return to the
AgenCY an 8t IRR (which calculation will include
Base Rent and Additional Rent payments made to the
AgencY) on the land value fiXed at $24,000,000.
b. For fiscal years in whi'ch Additional Rent is being
paid at Tier 5, bue not Tier 6: an amount equal to
the greater of (i) an amount to return to the
Age"CY an 8% IIlR (which calculation will include
Base Rent and Additional Rent payments made to the
Agency) on the land value fiXed at $24,000,000 or
(ii) a ten times multiple of the average Base Rent
and Additional Rent paid to the AgenCY during ehe
prior three full fiscal years.
Q. For fiscal years in which Additional Rent is being
paid at Tier 6, an amount equal to a ten times
multiple of the lesser of (i) average Base Rent and
Additional Rent paid to the AJaenCY during the prior
three fiscal yearS, or (11) average Base Rent and
Tier 6 Additional Rent which would have been
payable to the Agency during the prior three full
fiscal years determined as if payments were due in
Tier 6 for each of such three fiscal years.
Provided, hoWever. ehae (xl the purcb3Se price. with
respece to the exercise of the purchaSe option afeer December
1. 2004 shall be compueed pursuant to (i) (2) al>ove (..ithout
regard to (i) (1) above) if at least 122 days prior eo the
exercise of such option, SMHC shall have given the lIGency
notice of intent to exercise ies purchase opeion and
unconditionallY prepaid rent under the Ground Lease in an
amount sufficient to redeem the sonds in accordance with their
terms prior to the exercise of such purchase option. which
amount shall upon exercise of such purchase option be credited
against the purchase price ehereof. and (y) the purchase price
with respect to the exercise of the purchase option at any
eime after the holders of ehe Sands have been paid in full all
principal of and ineerese thereon and the Bonds have been
retired (oeher than as a result of (x) above 1 shall be
9
t>O', CO.7S'.DOCS.tc:.U'OlUI~_D~.
.. --- -..........
comguted pursuant to (i}(2l abOve (without regard to (i} (ll
above) and the requirements of (x) above shall not apply to
the exercise of such purchase option.
The parties acknowledge that clause (l) of this paragraph
(i) has been included based upon the present interpretation of
section l44 (c) (2) of the Internal Revenue code (the "code") in
relation to the Bonds by counsel to the AgenCY, The p~ties
agree that such clause (l) shall not apply if at any time SMHC
provides an oginion of tax counsel knowledgeable with respect
to the tax aspectS of tax-e:cefllPt bonds, in form and substance
satisfactory to the Agency and its counsel, to the effect that
the exercise of the purchase option at the price determined
pursuant to clause (2) will not adversely affect the exclusion
from groSS income for federa1 income tax purposes of interest
on the Bonds.
In the event, within ~2 months following the exercise by
SI'lBC of the purchase option (the date of exercise being caned
the "Exercise Date"), SMYC shall consummate the sale of the
Hotel to an unaffiliated third party (a "Post-Option sale")
with whom SMIlC had reached an agreement in principJ.e,
evidenced in writing. at any time during the 6-month period
prior to the Exercise Date, the post-Option sale shall be
deemed to have taken place on the Exercise Date and the Net
proceeds shaJ.J. be distributed as Net proceeds-in accordance
with E?a.ragraph 7, subject to a credit: in favor of SMSC in an
amount equal to the option purchase price theretofore paid to
the Agency.
(j) Lease and Transfer of Hote Pub ic as. In
consideration of (J.) the various taxes generated, and to be
generated, by the ownershiP and operation of the Hotel.. (2) .
the support of the convention center by the Hotel pursuant to
the agreement described in paragraph (1) below and (3) SMEle
providing the Funded EqUity ($15,000.000), the AgenCY shall
(A) lease to SMIlC for a term coterminous with the Ground Lease
all of the public areas of the Hotel o<med by the AgenCY and
(8) upon consummation of the purchase opti.on described in
subparagraph (i) aboVe. transfer aJ.J. of its right, title and
interest in the IIotel, including the public areas thereof, to
SMHC.
(k) Riqht of First Refusal. In the event the Agency
shall. desire to accept an offer for sale of aJ.J. of its
interest in the 1and and the Hote1, including the public areas
of the HoteJ.. SMHC shall have a right to purchase such
~terest upon the same terms and cooditions as che same are
offered and in accordance with the Agreements. The Agency
shaJ.J. not seJ.l. J.esS than its entire interest in the J.and and
the Hpte1.
~o
po,. tCK"7S..t)OCS"",u.UOUS)ttDOS_D~tCLC.
(1) co~ve~tion Cente~: SMHC will enter into an
agreement with the City oursuant to which the improvements
will be operated as a hotel and rooms will be made available
to suppo~ Convention Center eventS according to.a fo~ula to
be negotiated. The formula will cove~ the number of rOOMS
committed, rate structure, and timing of release of rooms f::om
the C~ty's rights pursuant to such agreeme~t. This ag=eement
will also provide for joi:lt marketing arrangements between the
Hotel and the City and for the designation of the Hotel as a
primary supplier of hotel services to suppor~ the Convention
Center. The term of the agreement shall expire upon the
earlier to occur of (J..) termination of the Redevelopme-"lt Plan
(without regard to any extensions chereof) or (2) the City's
failure to maintain the Convention Center at its present
location in at least its present size.
(m) The Agreements will include customary provisions and
such other provisiOns mutually satisfactory to the parties.
6. Definition of Net Cash Flow after Debt Service
"Net Cash Flow after Debt service. will be defined as .Hotel
Operating Profit" after deduction of Debt Service.
"Hotel Operating Profit" will be defined as total revenue from
operation of the Hotel frO<ll and "after the Hotel Opening Date
('Hotel Revenue') less all costs and expenses incurred in owning,
maintaining, conducting and operating the Hotel, other than Debt
Service, depreciation and amortization. These costs would include,
without: limitation, all operat:ing costs, such as wages and
benefits, the cost of goods, supplies, utilities and services,
repairs and maint:enance, the Base Rent, all }!otel Operator fees and
payment:s, capital additions and improvements (other t:ban those
funded through the reserve for additions t:o furnishings and
equipment, and except that no deduct:ion shall be penuitted for
capital additions and improvements which under the Agreements
require the consent: of. the llgency, unless such consent has been
obcai.D.ed or is deemed to have been obtained), all insurance
premiums, pa~t:s under equipment ~eases, real estat:e taxes and
assessments, and all payments into the reserve for additions,
substitutions and replacements to furnishings and equipment.
-Debt service- will be defined as all payments in respect of
principal and interest on "Deemed Debt..
-Deemed Debt" will be defined as the principal amount of
$66,000,000 for sO long as SMEC is the owner of the Hote~ and after
a sale of the Hotel by SMRC, the pdnci?&l amount equal to the
greater of $66, 000,000 or the act:ual principal amount not to exceed
75~ of the sale price (including assumed debt). To the extent
amounts of Deemed Debt a=e not: he~d by an institutional financing
source, debt service shall be calculated assuming interest payments
~~
00'. (047S. . 1XlCS.I'cL,uou.sl ~_DI$'t'V.DlO't':toel.
at: the Citibank, N .A. prime rate aDd principal payments i.n
accordance with a 20 year amortization schedule.
7. Apolication of Net Proceeds from Sale of the Rotel
In the event of a sale or refinancing, Net proceeds would be
determined as if such Net Proceeds were Net Cash Flow in the year
of the sale or refinancing and will be distri~uted to SMHC or i~s
successor and the Agency in accordance with the various Tie~s, as
Lf such Net Proceeds were Additional Rent as provided in Pa~agraph
5 (d). For purposes of calculating Net Proceeds, the gross proceeds
recei ved from such sale will be deemed to include any amounts
received by an affiliated hotel operator fo~ the transfer of any
interest of such hotel operator in the Hotel Management Agreement.
Subsequent to any sale or refinancing, Net Cash Flow would continue
to be distributed in the same manner as prior to the sale or
refinancing, but after taking into account. the distribution of Net:
Proceeds in payment of the various Tiers under Additional Rent to
SMHC or its successor and the Agency, as set forth above.
"Net Proceeds- will be defined as the proceeds from a sale
less debt repaid and all reasonable and customary transactioe.
costs.
For purposes of this paragraph 7, a sale shall be deemed to
mean any transfer by operation of law or ot)1erwise by SMHC of a
greater than ~O% ie.t.erest. in the Hotel or the Ground Lease or any
transfer, by operation of law or otherwise, by 5MBC's parent, of a
greater than ~ot equity. interest in SMHC, in either case to a
person who is not: a controlled affiliate of the Loews Hotels chain.
Any transfer to a controlled affiliate of the Loews Hotels chain
will not constitute a sale. In addition, with respect. to any
mortgage held by an institutiona1 financing source, provision will
be made so that (i) the transfer to a purchaser at a foreclosure
sale, {ii} a deed in lieu of foreclosure or other transfer to a
mortgagee, or (iii) a sue by such mortgagee would not constitute
a sale.
8 . Aqenc:v AD'Oroval Riahts
The Agreements will provide the following approval rights for
the Agency:
(a) plans: The Agreements will include preliminary
plans and specifications result:ing from the expenditure of
Design Costs described in paragraph 11 (the · Preliminary
Plans") for the construction of the Hotel, a pre-construction
budget and developmee.t budget which will have been approved by
1::he Agency and SMHC jointly as part of the negotiation of the
Agreements. '!'he budgets will include all of SME!C's (and its
affiliates') deV"elopment fees, reimbursables, payments to
affiliat.es and such other items reasonably requested by the
~2
DO' , (Q4 'TSI . DOCS "K:'-lIO 115 IIolDOS _I)IS:1tllO'I'ICIf .
Agency. 1'he
submission and
the Agency a
construction.
Agreements will include a cimetable for
approval of final plans. SMHC will provide to
critical-path schedule prior to che sta=t of
1:he )>.genCY will have the right to approve material
changes. additions and alterations contained in the final
plans to the extent such final plans do not substantially
complY with the approved preliminary plans. The )>.genCY may
not object to changes required to comply with applicable laws
in sO far as such objection relateS to cost overruns. Any
objections by the )>.genCY to material changes. additions and
alterations will be reasonable and specifiC, and, at the
Agency's option, may include alternate choices which would not
result in e:<tra cost. If the Al;enCY valiclly and appropriately
objects to a change proposed by SMHC and such objection is
upheld following binding arbitration, if aD.y, SMHC may. to the
extent permissible under applicable laws, nevertheless
implement the change, but aD.y resulting budget overrun would
not be reimbursable as Additional Rent or otherwise, except as
provided for in the )>.greements. If the Agency approves a
change but at a justified lower cost than proposed by SMHC.
only the cost approved by the Agency (or as established
fqllowin9 binding arbitration) will be included in 5MBC's
allowed overrun (see .Additio=J. Rent.). l'otwithstanding the
Agency's approval of aay plans or specifications and changes
theretO, 5MBC will be required to comply with all applicable
laws with respect to the tonst~ction and operation of the
notel, includi.a-9, witb<>Ut limitation, the obtaining of any
required consents and permits required under applicable laws.
The AgenCY's approval rights will not cover areas of
interior design and decor except to the extent reflected in
the approved prelimiJ;1arY Plans. 1:he AgenCY' will have the
right to inspect the project during construction and to have
an on-site reoresentaeive at its sole cost and expense. 5MBC
wUl not c<><=ence construction on a portion of the llotel until
any required approval. of applicable final plans has been
obtained. fx:om the AgenCY.
(b) Financia;!. s~atements' 'SM!iC will deliver to the
Al;enCY monthly unaudited and annual audited financial
statements. In addition. the Agency will be provided annually
with an information copy of a projected inco.... statement
reflecting the budget for the upc0min9 year. All financial
statementS will be prepared in accordance with the Uniform
system of AccountS for Hotels (8th Revised Edition) ("U$AH.) .
All financial statementS and books of account relating to
operation of the Hotel and/or determination of rent will be
available .for audit and """.u.na.tion. The lIgenCY will have the
right to challenge anY expenditure that is not properly
calculated, which represents an oVerhead cost properlY
13
00': t 04 -rsa .:XX:S .XIA1.IO us 1 ~ _ \)IStJlIJ'OTICJt.
chargeable to the management: compar.y's home office (includi~g
subsidia::ies and affiliates of t:he management company) as
opposed co che !locel. or any coscs fraudulently incurred.
Provision will be made to attempt: to ensure confidential
treatment. of all iniormation relating to competitive or
proprietary information. In che event che Agency'S audic
shows that. the Agency's share of Additional Rent: has been
understated by 3% or mo::e, then S~~C will pay to the Agency
che cost. of such audit in addition to any deficiency paymeat
required.
(c) Sale of the Hot:e~: A sale (as defined below) of the
Hocel or SMHC's interesc in the Ground Lease shall be subject
to the Agency'S approvaL For purposes of this paragraph
8 (c), a sale shall be deemed to mean any cransfer by operation
of law or other-orise by SMHC of a greater than 50% interest in
che Hotel or the Ground Lease or .....-,.y transfer. by operation of
law or otherwise, by SMHC'S parent., of a greate~ than 50%
equity interest in SMIlC, in either case to a person who is not
a controlled affiliate of the L.oeWS Hotels chain. Any
transfer to a controlled affiliate of the LoeWS Hotels chain
~ll not: constitut.e a sale. In addition, with respect to any
mortgage held by an insticutional financing source, provision
will be made so that (i) the transfer to a purchaser at a
foreclosur~ sale. (ii) a deed in lieu of foreclosure or other
transfer to a mort:.gagee, or (iii) a sale by such mortgagee
would not constitute a sue.
'the Agency reserves t:.he right to disapprove the sue of
the BOtel to a foreign government or inscrumentality thereof
or an entity controlled thereby.
Nocwithstanding the' foregoing, a sale of the Hotel co a
Qualified Purchaser (as hereinafter defined) shall be deemed
reasonable and not require the consent of the AgenCY.
A "Qu.a1ified Purchaser- for purposes of this section
shal.l. mean a purchaser that: (i~ is (a) a perm:itt:.ed Operator,
as hereinafter defitled, or (b) a f:i..n.ancial. i.nstitutiotl
(including, but not limited to, banks, life i.n.sUrance
companies, or pension fundsl or an institutional inVest:or in
real property or interestS in real propertY (such as a tlEIT,
REMlC or other public or private investment fund), which has
engaged a Pe:z:mitted Operator; (ii) is not a foreign government
or instrumentality thereof or an encity controlled thereby;
and (iii) agrees to be bound by aU the terms and conditions
of all the Agreements-
(d) Hew Management company' ~e AgenCY will have the
right to approve a neW hotel operator (including the sale or
transfer of more than a 50~ interest in che currenC Hotel
Operator) . The AgenCY reserves tb.e right to disapprove a
1.4.
DO': t 04 7S1 .1lOCS . KXA11 ou.s 1 J0'C'S _ot$'t1lI3OTtQlf .
hotel operator controlled by a foreign govercment or
inscrumencality thereof.
Notwithstanding the foregoing, a change in the Hotel
Operator shall be deemed reasonable and not require consent of
the Agency if the. resulting hotel operator is a permitted
Operator. A 'permitted operator' for the purposes of this
section is an entity which (i) is not a foreign government or
instrumentality thereof or an entity controlled thereby; and
(ii) together with its affiliateS, (a) has been engaged in the
operation or management of hotels for at least five years and
has operated or managed during such 5-year period at least one
conventiOn hotel (i.e., 600 or more rOOms and 40,000 or more
square feet of meeting space) which meetS the quality
standards set forth in the Ground Lease, and (b) has a
na1;ional marketing operation under a national flag or has
.entered into an agreement with a botel chain which has a
nat~onal marketing operation under a national flag.
(e) Ricrht;< to ~, The AgenCY will have the right to
cure defau1.ts by SMHC under any mortgage, the Hotel Management
Agreement and such other agreementS as the parcies may agree
upon, and all such agreementS "i.l1 so provide.
(f) l-poroval Notice1!.: (1) Neither the lIgenCY nor SMHC
shall unreasonablY delay, withho1d or condition any requested
approva1 required under anY of the Agreements or this Letter
of Intent. If a request by 5MBC re1ates to the approval of
certain matters to be mutuallY agreed upon by the parties,
such as the sale of the Hotel or chAnge in the Hotel Operator
as aforesaid, and the AgencY fai1s to respond within the
provided time period, then after the expiration of such time
period 5MHC may resuJ:>mi.t itS request to the lIgenCY, and
provided such request (and the enve10pe in which such request
is transmitted) collSpic:uous1y bea-.'"S the following 1egend, the
matter stated in the .request sha11 be deemed approved by the
~enCY if the AsJency shall fail to disapprove such second
request within 30 days after receipt thereof: .
'FAILURE 'l'O RESPOND 'l'O THIS llEQW..5T wrrm:N 30 DAYS SHALL
CONSTITOTE A1J'l'OMA'l'IC APPROVJU. OF ntE MA'J.'TERS DESCRIBED lIE1lEIN
wrra RESPECT 'l'O pJ\1ll\GRAPH OF THB [NAM& OF AG~]
~
DATED ' BETWEEN [DESCRIBE ~A.'CtTIES].
(2) It is contemplated that the Jlgreements will provide
for an expedited approval process during the period prior to
the Hotel opening Date.
(3) If the AgenCY's or SI'IIlC's approval is required under
any of the Agreements, upon disapproval of a request, the
disapproving partY will provide written reasons supporting
such party's disapproval of such matter to the other party.
~5
DO" (04"7"; I . DOCS .J<Q\J.lousll'lDC5 _ DtS'tIl3O"t"t~.
Each party shall deliver to the other party itS approval or
disapproval of ;w.y request for approval pursuant to the
Agreements within the applicable time period. If a party does
not provide a response to a request for ;w. approval within the
time period set forth in the Agreements (whether such approval
request requires a single or double notice), such request
shall be deemed approved.
9. Hotel Manaaement: Acrreemen!;.
Pursuant to a management agreement (the "Hotel Management
Agreement"!, the Hotel will be operated by ;w. affiliate of Loews
Hotels, Inc. ("Hotel Operator"! as a first class, upscale
convention property in the LoewS Hotels chain in accordance with
che fol1owing provisions:
(a! Management' The Hotel will be managed by Hotel
Operator as part of the LoeWS Hotels chain in accordance with
the standards set forth in "he Ground Lease. Hotel Operator
wi.ll have exclusive authority to operate the Hotel in the name
and for the account of SMHC.
(b! :r..echnical Se:<'l'ice;;.' Hotel Operator will provide
technical serv.J.ces to assist SMIlC in the construction,
furnishing ;w.d equipping of the Hotel. These services will
include, among other things, (i! review ;w.d approval of
architectural. plans, plans for design and decor and plans for
furnishing all of which will be subject to Hotel Operator's
approval to ensure that the Hotel will meet the st;w.dards set
forth in the Ground Lease, (iil develop criteria for furniture
and equipment and assistanCe in obtainin9 sources of supply;
and (iii! assistance in coordinating purchases and
instal.lation of furnishings and equipment. Hotel Operator
will be paid a one-time fee of $300,000 by SMIlC for providing
techniCal. services, plUS reimbursement of actual costs (which
will not include executive time! in providing technical
services during the pre-opening period. These costS and fees
are included in the estimated budget referred to in Paragraph
8 of this letter.
(c! Pre-noening seroces' Hotel Operator will provide
required services to SMIlC to prepare the SOtel for 0penin9,
including among other things, (il re<:ru.iting, training and
employing (in the name of SM!lC! Hotel staff; (iil pre-opening
marketing ;w.d advertising; (iii! negotiating contracts for
stores, concessions, leases, supplies and similar items, (iv!
assistance in obtaining necessary licenses and permitS, and
(v! assistanCe in purchasing initial. operatin9" supplies.
Hotel Operator will be reimbursed by SMliC for the cost of
providing these pre-opening services, including executive and
staff time, and out-of-pocket expenses. These costs and fees
].6
00': (O"7S..DOCS.xu.:.'OUSlrQo()S_t>~Ql(.
are included in the estimated budget, referred to in paragaph
8 of this letter.
(d) Term: 30 years, with four renewal options of 15
years each and one final renewal option of 9 years. The Hotel
Operator may not, without the consent of the Agency, exercise
a renewal option unless the Agency has received an 8% per
annum cumulative (not compounded) return (i.e., Base Rent and
Additional Rent) on the land value fixed at 524,000,000;
provided, however, that the foregoing requirement will cease
co be applicable once the Agency bas received an 8 t; IRR
(including Base Rent and Additional. Rent actually paid) on the
land value (fixed at $24,000,000) - Eotel Operator will have
the right to cure any shortfall with respect to the required
8% cumulative return by direct payment to the Agency, with any
such direct payment being deemed Additional Rent.
(e) Manaaement Fee:
,
~. Base Fee: 3% of Hot:el Revenue (calculated in
accordance with USAH) .
2. Grout) MarketinQ" Fee.: 1..25\' of Hotel Revenue.
The Group Marketing Fee represents payment for chain wide
advertising and marketing services provided by the Loews
home office, including overhead expenses of regional
sales offices. These services will include a cent:.ral
sales aIld marketing operation supported by regional sales
offices and nationwide corporate advertising, marketing
and promotion programs. The Hotel Operator will provide
tbese services to the Hotel on t:.he same basis as it:
provides similar sez:vices to other hotels in its chain.
3. Reservation Fee~: The cost of centralized
reserVation services provided by the Hotel Operator (or
through a third pa:r'CY service provider) shall be
allocated..to che Hotel on a pass-through basis with no
mark-UP, but in no event shal.l ~e cost per booking
increase by more than ehe system-wide increase charged to
other hotels in the chain.
4. Franchise Fee: Upon the execution of a new
management agreement with a new hotel .operator, such.
hotel franchisor's usual and customary franchise fee, not
to exceed 2% of rooms revenue.
In addition, Hotel Operacor shall be reimbursed for out-
of-pocket ex;>enditures reasonably and properlY in=red in the
course of the management and operation of the Hotel, as co be
set forth in more detail in the Rotel Management Agreement.
This would include, among other things, travel and
17
DO'1 co.n" .COCS.KIAl'0l1S1)4Z)<()S_O~QIC'.
encercainment, teleohoce a...,d othdr incidental eJC:jenses of
employees in performing services actually and specifically
incurred in connection wich the Rotdl. In no event will OUC-
of-pocket expenditures include regular overhead expenses of
notel Operator's corporace facilities or compensation of home
office employees.
Notwithstanding the provisions of subparagraphs (e) (1)
and (e) (2) above, in che event a management agreement shall be
entered into wich a new hotel operator, the combined Base Fee
and Group Marketing Fee shall not exceed 4.25% of Hot.el
Revenues.
(f) pualitv Standard: Hotel Operator will be required
to operate the Hotel as a first class, upscale convention
center hotel, including high-quality banquet, conv~~tion and
meeting services and facilities, multiple-food and beve=age
outlets, room service, bell service, laundry and valet
services, a heal tn and fitnesS facility, and such ocher
services as are generallY provided by comparable upscale
convencion center hotels of natiooal repute, consistent with
the Hotel's physical facilicies, and i.n any event, the quality
of the Hotel operations and facilities (consistent with the
Hotel's physical hcilities as chey then exist) will be
comParable to not less than 3 or more than 5 convention center
hotels (or such other comparable. hotels which the parties
shall mutually select pursuant to che Agreements) to be agreed
on by the parties. The comparable convention center hotels
will be rees~ablished by agreement becweeo the parties every
].0 years. The failure to operate the Hotel as required above
will constitute an event of default under the Ground Lease
and, if not =red, che AgenCY will be entitled to enforce this
provision wich appropriate remedies, including termination
and/or cure rights. NotwithStanding the foregoing, Hotel
Operator will not be required to fund monies ocher than chose
required to be in the FF r.E Reserve for the replacement of
furniture and equipment necessary to meet the foregoing
standard. The foregoing shal,l not be deemed to diminish
SMHC's obligation to ma~tain the Hotel consistent with the
physical facilities of the Hotel as constructed pursuant to
the Agreements.
(g) FFr.E Reserve, Hotel Operator will be required to
establish a rese:.-ve for replacement and additiOns to furniture
and equipment initially funded at ].% of Hote]. Revenue iD the
first fiscal year, increasing to 2% in. the secood fiscal year,
3 % in the third fiscal year and 4% iD the fourth and each
fiscal year thereafter. The FFr.E Reserve will be held in a
segregated account and such funds shall only be used for
replacements and additions as aforesaid.
].8
00', (04 7S'.tlOCS .)(IA:.'Ol.lS1IQo()S_Dt~racnCllf.
(h) Radius RestrictiO~: Without the prior consent 0:
the Agency. Hotel Operator ..ill not operate a convention
property (i.e., 600 or more rooms and 40.000 or more sauare
feet of meeting space; hereinafter, a "convention hotel"
(including any meeting space available to Hotel Operator
pursuant to any license or shared facilities agreements or
other"'isell within the area ("Territory"l comprised of Dade
county north to and including the CitY of Ft. Lauderdale:
provided however. . that this provision will in no event be more
restrictive (or shall no longer be applicable, as the case may
be) than any radius restriction (or lack of restriction)
regarcling any other hotel cow or hereafter located in the area
north of 5th Street and south of 44th Street receiving ~
excesS of 55.000.000 in value of AgencY or City funds (or
funds controlled thereby. including tax benefitsl. The
Hotel'S radius restriction will terminate or exclude certain
properties as described bel","" as applicable, upon the
occurrence of.any of the following eventS:
(il if the Hotel is acquired by a purchaser who is
part of a hotel chain (i.e., t"" or more hotels) or SMliC
purchases a hotel chain and in either event such chain
haS one or more properties in the Territory. then such
propereies shall be excluded from the radius restriction;
(iil the purchase of the Agency's interest in the
Hotel, including the land, by SMHCi and.
(iiil the te".unatiOn of the Redevelopment Flan
(without regard to anY extension thereef) .
1.0. ~t:e I-a
The AgenCY will enter into an agreement with SMHC with regard
to site J.-B (i.e.. the lot presentlY owned by the AgenCY and the
second lot if subsequently acquired by the Agency) providing
development on each lot will conform to applicable :z:oning laws and
requests for proposals applicable to such development and such
other matters as the parties may determine: if =-y. by UlUtually
acceptable agreemene.
J.:I.. ~s~an oevelooment j;:xDense Reimburse"""'.!;.
The parties acknoWledge that SMKC will. of necessity, incur
significant out-of _pocket costS for professional architectural
design, engineering and other technical advice and services in
. connection with the design. construction and permitting of tbe
Hotel ("Design costs.) prior to the execution of tbe Agreements.
In consideration of the foregoing, and in order to insure the
timely consummation of the transactions contemplated hereby, sMHC
and the Agency have agreed that sue costS will be subject to
reimbursement as follows:
~9
1)0' I (CM7S1 .COCS.~IOUS)HD4)'_t)t~toac.
(a) if the Agency or che city, as applicable, bas not,
prior co December 15. 1995. eneered ineo binding agreemenes co
raise ehe funds necessary co meee ies obligaeions as
coneemplaeed by paragraph 2 (b) (3) and paragraphs 3 (a) and (bl.
then tbe Agency shall. no later than December 31. 1995. pay co
SMEC the Qualified Design Costs (as hereinafeer defined) ;
(bl if SMHC has not by December 15. 1995 entered into
binding financial commiements to obtain the first mortgage
financing as contemplated by paragraph 2(b1 (11. SK~C shall
bear all Design Costs incurred by it; and
(cl if the Agreements are not in final form acceptable
to the parties for execution by December 15. 1995. for any
reason whatsoever. including the mutual failure of SMHC and
the Agency . (or the City. as the case may bel to obtain
financing commitmenes pursuane to (a) and (b) abOve. SMHC
sbaH bear one bal.f of the Qualified Design costs and the
AgencY sball. nO later than December 31. 1995. reimburse SMHC
for one balf of the QUalified Design Costs. .
T"" term "Qualified Design costs" sball mean Design costs in
an amount not to exceed $1. 600.000; pro'Vided. however. that if
between July 15. 1995 and August 1. 1995 the AgenCY notifies SMaC
that it wishes SMHC to sus~ further design work. QUalified
Design Costs shall not exceed $1,090,000.
~2 . General
(al Arbit~tion: AnY contrOverSY or claim relating to any
of the AgTeements (or the breach thereof) will be settled by
arbitration in accordance with standards and methodology to be
negotiated between the AgenCY ami SMIlC. The Agency and SMIlC will
negotiate an expedited arbitration regime with respect to pre-Botel
Opening matters. which regime may include the advance appointment
of a qualified arbitrator.
(bl j:.iabilit)r, The AgTeements will incorporate provisions
with respect to the li-.itation of SMllC' s. the AgenCY's and the
city's liability thereunder. as applicable. ....tually acceptable to
the parties. with the same providing for reasonable damages. but no
punitive damages.
(cl Definitive A=eementll' Upon execution of this Letter of
Intent by S..."HC and approv-aJ. of the terms hereof by the appropriate
AgenCY and city bodies. the AgenCY' s counsel will cL...-aft the
Agreements (other than the aotel Management Agreement. agreements
to which the Agency or city is not a party and other agreements as
the pa-~ies may agreel. The Agreements will contain. among other
things, representations. warranties. . conditions. covenants and
inde~ities and the like typical in similar transactions. subject
to the terms hereof. The consummation of the transactions
20
DO': tons-.DOCS .KXutoUSl ~_l)I~OIC.
, .
contemplated hereby is conditioned upon the negotiation and
execution of the Agreements with terms, provisions and conditions
mutually acceptable to SMHC, the Agency and the City as well as the
obtaining of all necessary financing and the satisfaction of the
parties with all other agreements and matters necessary or
desirable with respect to the transactions contemplated hereby.
The parties shall comply with all applicable laws, statutes,
regulations and requirements and performance by the Agency, the
City and SMHC under t~is Letter of Intent and the Agreements shall
be subj ect thereto.'. -
(d) Structure of Lessee: The entity constituting lessee and
developer will be MB Redevelopment, Inc., HCV, Inc., VRA, Inc. SMR
Redevelopment, Inc. and/or THR Redevelopment, Inc. or partnerships
of which one or more of the foregoing will be general partners.
The Agency and SMHC will cooperate in structuring the transactions
contemplated hereby accordingly.
(e) Assignment by Agency: In the event the Agency ceases to
exist, the Agreements will provide that the rights granted to the
Agency will inure to the benefit of the City and the City will te
bound to perform the obligations therein.
(f) Termination: Subject to the terms of Paragraph 11, this
Letter of Intent may be terminated by either party if the
Agreements have not ~een completed by December 15, 1995.
(g) Non-binding: Subject to the terms of Paragraph 11,
neither party shall have any legally binding obligation to the
other until such time as the Agreements are executed by all parties
thereto.
(h) This Letter of Intent may be amended by a written
agreement executed by both of SMHC and the Agency.
AGREED AND ACJCNOWLEDGED:
MIAMI BEACH RED1ilZBVBO AGENCY
/ rJ ~
I ~
By:" I _' __ I '~_.
N f~'7"';""'/. ,~I~
... Titl C.&"'...lr .-.:.N
S/31c;.r
Date
s/~hs
Date
.. [SIGNATURES CONTINUED ON FOLLOWING PAGE]
21
:
..
Jt,RI?ROVlW Ui ~JU(:. _
BY:V~~
- Laurence Feiogo ,
General Counsel
tI/1P/'JO
Da~e .
APPROVED:
By: I i
. ame:
I T:i. tle
APPROVED AS 4~
By. tPY
~ LaUXence Fe. goJ.d,
city Aeeorney
..
By
1)0" t"7S'.POCS~'OUS1.cros_D~~.
sm95
Dace
>1 ~ ICfS
Date
J;,/JJ;/JC
FO~~~VED .
~~~
22
AMENDMENT
This is an Amendment (the "Amendment" ), dated as of December 6,1995, to that certain
Letter of Intent (the "LOI"), dated as of May 3, 1995, a copy ofwruch is attached hereto. Both the
Amendment and the LOI are by and between the Miami Beach Redevelopment Agency, a public body
corporate and politic (the "RDA ")~ the City of Miami Beach, Florida, a Florida municipal corporation
(the "City")~ St. Moritz Hotel Corporation, a Florida corporation ("SMHC"); and Loews Hotels
Holding Corporation, a Delaware corporation ("LHHC").
RECITALS
WHEREAS, SMHC was the winning bidder in response to the Convention Center Hotel
Request for Proposals~ and
WHEREAS, the RDA. the City, SMHC and urnc executed the LOI, pertaining to, among
other things, the development ofan approximately 800 room hotel (the "Hotel") at and near 16th
Street east of Collins Avenue, Miami Beach and an approximately 800 car garage (the "Garage") to
be located at or near 16th Street between Collins and Washington Avenues, Miami Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
WHEREAS, the LOI provides, among other things, that if the agreements for the
development of the Hotel and Garage and related matters are not executed by the RDA and SMHC
prior to December 15, 1995, the RDA or the City may be responsible to reimburse SMHC for certain
design expenses for the development of the Hotel and the Garage; and
WHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank financing and property acquisition, the
RDA, the City, SMHC and LHHC would like to amend the LOr to extend the time by which
agreements must be executed and liability for reimbursement of design expenses might apply; and
. .
WHEREAS, Paragraph 12(h) of the LOI provides that the LOI may be amended by a written
agreement executed by both of SMHC and the RDA.
NOW THEREFORE, in exchange for the mutual promises contained herein, and other good
and valuable consideration, the receipt and adequacy of which is hereby conclusively acknowledged,
the parties agree as follows:
1. ABOVE RECITALS.
The above recitals are true and correct and are incorporated as a part of this
Amendment.
EXHIBIT IIBII
2. MODIFICATIONS.
a) Paragraph 11 of the LOI, entitled "Design Development Expense
Reimbursement", is amended as follows:
1) All references to "December IS, 1995" are changed to "January II,
1996. "
2) All references to "December 31, 1995" are changed to " January 3 1,
1996. "
b) Paragraph 12(t) of the LOI, entitled "Termination" is amended as follows:
The reference to "December 15, 1995" is changed to "January 11, 1996."
3. OrnER PROVISIONS OF LOI.
The other provisions of the LOr are unchanged.
4. RA TIFICA nON OF LOt
The RDA, the City, SMHC and LHHC ratify their agreement with the terms
of the LOL as modified by this Amendment.
s. GOVERNING LAW.
lbis Amendment shall be governed by and construed in accordance with the
laws of the State of Florida, without reference to principles of conflicts oflaw.
6. HEADINGS.
Headings in this Amendment are only for convenience, ue not a substantive
part of this Amendment or the LOr and do not affect the meaning of any provision of this Amendment
or the LOI.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their appropriate officials.
l\1lAMI BEACH REDEVELOPMENT AGENCY
By:
By:
2
~Chairman
FORM APPROVED
REDEVELOPMENT AGENCY
:AY~
Date ..l\I~~
Date:
A TrEST:
By:
Date:
I';-he; l:
, I
A TrEST:
cl ) r;,\
By: ~ 1~ ~JX}-
G-e..r y lj .C~ oor'
Print Name
f 1./ I jq:
Date:
A TrEST:
.
",Jl---
By:
C-C~11 L~ 8"'r
rint Name
Dale: 11/7 k
AIT:kw:c::wpwin6O\ait\smhdhhc:.amd
CITY OF MIAMI BEACH
By:
Date:
er, Mayor FORM APPROVED
LEGAL 9J;PT.
8y 111 #! YJ-
Date lygo!?5
.
ST. MORITZ HOTEL CORPORATION
By:
~tJ"Tl'h\,v H.llxlf t fr€!'
Print Name and Title
Date:
I ].;h hI/'
LOEWS HOTELS HOLDING CORPORATION
By:
Date: I t.hA (
3
The Letter of Intent is an Exhibit to this Amendment but has
intentionally been omitted to avoid duplication, as it is
already attached to the Fourth Amendment.
SECOND AMENDMENT
This is a Second Amendment ( the "Second Amendment" ), dated as of January 10, 1996,
to that certain Letter of Intent (the "LOllt), dated as of May 3, 1995, a copy of which is attached
hereto as Exhibit itA" and incorporated herein, as amended by that certain Amendment to the LOI
(the "Amendment"), dated as of December 6, 1995, a copy of which is attached hereto as Exhibit"B"
and incorporated herein. The Second Amendment, the Amendment and the LOI are by and between
the Miami Beach Redevelopment Agency, a public body corporate and politic (the "RDA"); the City
of Miami Beach, Florida, a Florida municipal corporation (the "City")~ St. Moritz Hotel Corporation,
a Florida corporation ("SMHCIt); and Loews Hotels Holding Corporation, a Delaware corporation
("LHHC"). The LOI, as amended by the Amendment, is referred to herein as the "LOI, as
amended. "
RECIT ALS
\VHEREAS, SMHC was the winning bidder in response to the Convention Center Hotel
Request for Proposals; and
WHEREAS, the RDA, the City, SMHC and LHHC executed the LOI, pertaining to, among
other things, the development of an approximately 800 room hotel (the "Hotel It) at and near 16th
Street east of Collins Avenue, Miami Beach and an approximately 800 car garage (the "Garage") to
be located at or near 16th Street between Collins and Washington Avenues, Miami Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
WHEREAS, the LOI originally provided, among other things, that if the agreements for the
development of the Hotel and Garage and related matters were not executed by the RDA and SMHC
prior to December 15,1995, the RDA or the City may be responsible to reimburse SMHC for certain
design expenses for the development of the Hotel and the Garage; and
\VHEREAS, the RDA, the City, SMHC and LHHC executed the Amendment, extending,
among other things, the date referenced in the preceding paragraph to January 11, 1996; and
\VHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank financing and property acquisition, the
RDA, the City, SMHC and LHHC would like to amend the LOI, as amended, to extend further the
time by which agreements must be executed and liability for reimbursement of design expenses
might apply; and
WHEREAS, Paragraph 12(h) of the LOI, as amended, provides that the LOI, as amended,
may be modified by a written agreement executed by both of SMHC and the RDA.
NOW THEREFORE, in exchange for the mutual promises contained herein, and other
good and valuable consideration, the receipt and adequacy of which is hereby conclusively
acknowledged, the parties agree as follows:
EXHIBIT HC.
1. ABOVE RECITALS.
The above recitals are true and correct and are incorporated as a part of this
Second Amendment.
2. MODIFICATIONS.
a) Paragraph 11 of the LOI, as amended, entitled "Design Development Expense
Reimbursement", is modified as follows:
1) All references to "January 11, 1996" are changed to "January 25,
1996."
2) All references to "January 31, 1996" are changed to "February 9,
1996."
b) Paragraph 12(t) of the LOI, as amended, entitled "Termination" is modified
as follows:
The reference to "January 11, 1996" is changed to "January 25, 1996."
3. OTHER PROVISIONS.
The other provisions of the LOI, as amended, are unchanged.
4. RA TTFICA TION.
The RDA, the City, SMHC and LHHC ratify their agreement with the terms
of the LOI, as amended, as modified by this Second Amendment.
5. GOVERNING LAW.
This Second Amendment shall be governed by and construed in accordance
with the laws of the State of Florida, without reference to principles of conflicts of law.
6. HEADINGS.
Headings in this Second Amendment are only for convenience, are not a
substantive part of this Second Amendment or the LOI, as amended, and do not affect the meaning
of any provision of this Second Amendment or the LOI, as amended.
2
IN \VITNESS \VHEREOF, the parties hereto have caused this Second Amendment to be
executed by their appropriate officials.
ATTEST:
By: M By:
~btieffi.,-ITNer-iffi-Secretary
Robert Parcher,
Date: , I 2-2-/ 9 ~ Date:
ATTEST:
(L.~~ f....~
By:
lack,.~~ll1il~~~m-City Clerk
Robert Parcher,
Date: ~
:~E)3~
QIj 'v\J . Grm;; all
Print Name
(ft7(7b
.....
Date:
:~E~T~
GD-~ W. ~rsQt\
rint Name
Date: ~
AIT:kw:c:wpwin60\ait\smhclhhc.2am
By:
ORITZ HOTEL CORPORATION
9/i1lt11~
(
-SEJ~ tt-THlf\! ~\. ~sc.k\PreS'
Print Name and Title
Date: -LI t7 ( 'b
LOE\VS HOTELS HOLDING CORPORATION
By:
I
Print Name and Title
Date:
,(171ft,
FORM APPROVED
By ~~It--
Date
3
The Letter of Intent is an Exhibit to this Second Amendment
but has intentionally been omitted to avoid duplication, as it
is already attached to the Fourth Amendment.
THIRD AMENDMENT
This is a Third Amendment ( the "Third Amendment" ), dated as of January 24, 1996, to that
certain Letter of Intent (the "LOI"), dated as of May 3, 1995, a copy of which is attached hereto as
Exhibit "A" and incorporated herein, as amended by that certain Amendment to the LOI (the
"Amendment"), dated as of December 6, 1995, a copy of which is attached hereto as Exhibit "B" and
incorporated herein, and as further amended by that certain Second Amendment to the LOI (the
"Second Amendment"), dated as of January 10, 1996, a copy of which is attached hereto as Exhibit
"C" and incorporated herein. The Third Amendment, the Second Amendment, the Amendment and
the LOI are by and between the Miami Beach Redevelopment Agency, a public body corporate and
politic (the "RDAn); the City of Miami Beach, Florida, a Florida municipal corporation (the "City");
St. Moritz Hotel Corporation, a Florida corporation ("SMHC"); and Loews Hotels Holding
Corporation, a Delaware corporation ("LHHC"). The LOI, as amended by the Second Amendment
and the Amendment, is referred to herein as the "LOI, as amended."
RECIT ALS
WHEREAS, SMHC was the winning bidder in response to the Convention Center Hotel
Request for Proposals; and
WHEREAS, the RDA, the City, SMHC and LHHC executed the LOI, pertaining to, among
other things, the development of an approximately 800 room hotel (the "Hotel") at and near 16th
Street east of Collins Avenue, Miami Beach and an approximately 800 car garage (the "Garage") to
be located at or near 16th Street between Collins and Washington Avenues, Miami Beach; and
WHEREAS, negotiations are proceeding on numerous agreements relating to the
development of the Hotel and Garage; and
WHEREAS, the LOI originally provided, among other things, that if the agreements for the
development of the Hotel and Garage and related matters were not executed by the RDA and SMHC
prior to December 15, 1995, the RDA or the City may be responsible to reiplburse SMHC for certain
design expenses for the development of the Hotel and the Garage; and
WHEREAS, the RDA, the City, SMHC and LIlliC executed the Amendment, extending,
among other things, the date referenced in the preceding paragraph to January 11, 1996; and
WHEREAS, the RDA, the City, SMHC and LIlliC executed the Second Amendment,
extending, among other things, the date referenced in the preceding paragraph to January 25, 1996;
and
WHEREAS, due to, among other things, the work and time involved in connection with the
negotiation of numerous agreements, a bond issuance, bank financing and property acquisition, the
RDA, the City, SMHC and LHHC would like to amend the LOI, as amended, to extend further the
time by which agreements must be executed and liability for reimbursement of design expenses
might apply; and
EXHIBIT nD-
WHEREAS, Paragraph 12(h) of the LOI, as amended, provides that the LOI, as amended,
may be modified by a written agreement executed by both of SMHC and the RDA.
NOW THEREFORE, in exchange for the mutual promises contained herein, and other
good and valuable consideration, the receipt and adequacy of which is hereby conclusively
acknowledged, the parties agree as follows:
I. ABOVE RECITALS.
The above recitals are true and correct and are incorporated as a part of this
Third Amendment.
2. MODIFICATIONS.
a) Paragraph 11 of the LOI, as amended, entitled "Design Development Expense
Reimbursement", is modified as follows:
1) All references to "January 25, 1996" are changed to "February 8,
1996."
2) All references to "February 9, 1996" are changed to "February 22,
1996".
b) Paragraph 12(f) of the LOI, as amended, entitled "Termination" is modified
as follows:
The reference to "January 25, 1996" is changed to "February 8,1996."
3. OTHER PROVISIONS.
The other provisions.of the LOI, as amended, are unchanged.
4. RATIFICATION.
The RDA, the City, SMHC and LHHC ratify their agreement with the terms
of the LOI, as amended, as modified by this Third Amendment.
5. GOVERNING LAW.
This Third Amendment shall be governed by and construed in accordance
with the laws of the State of Florida, without reference to principles of conflicts of law.
2
6. HEADINGS.
Headings in this Third Amendment are only for convenience, are not a
substantive part of this Third Amendment or the LOI, as amended, and do not affect the meaning
of any provision of this Third Amendment or the LOI, as amended.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
executed by their appropriate officials.
ATTEST:
By: "ELlJ..k~ e~~
Robert Parcher, Secretary
Date: ~
ATTEST:
By: ~o~1r e~
Robert Parcher, City Clerk
Date: ~
ATIES~ . I~
By:' ~\L-B-
/ /r
....-'
Gary w. Garson
Print Name
Date: 1/25/96
ATTE.S.~,
By: (,J
/'
\
~
~
Gary w. Garson
Print Name
Date:
1/25/96
AIT:kw:c:wpwin60\ait\smhclhhc,3am
[)
ymour Gelber, ChairmRfiDEVELOPMENT AGENCY
GENERAL COUNSEL
Date: A h 011. /1 ..
By / flf4 '!~
.J/J 9/~~
FORM APPROVED
DEPT.
By /Uf1t1~
Date (/19,/-1 G
ST. MORITZ HOTEL CORPORATION
Date:
By:
~,~ .
ck S. Adler
Print Name and Title
Date: 1/25/96
LOEWS HOTELS HOLDING CORPORA nON
By:
~. q
ack S. Adler
Print Name and Title
Date: 1/25/96
3
The Letter of Intent is an Exhibit to this Third Amendment
but has intentionally been omitted to avoid duplication, as it
is already attached to the Fourth Amendment.