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LTC 79-2002 t CITY OF MIAMI BEACH Office of the City Manager Letter to Commission No. 1f{12m? m From: Mayor David Dermer and Members of the City Commission Jorge M. Gonzalez~. A ~ City Manager ~v 0 ROYAL PALM C OWNE PLAZA HOTEL Date: March 25, 2002 To: Subject: Pursuant to Commissioner Cruz' request during the Commission discussion regarding the Royal Palm Crowne Plaza Hotel, attached please find the following items: 1. Staff summary of Outstanding Issues regarding the Royal Palm Crowne Plaza. 2. Latest request from Don Peebles regarding Lease Modifications proposed by him. 3. Compilation of material to include in Estoppel Letter recently requested by Don Peebles. As Commissioner Cruz mentioned, if you have any suggestions on these matters, please forward them to me for consideration. Should you require additional information. please feel free to contact me directly. JMG\ptw F:\CMGR\$AllILtc-02\Royal Palm Crowne Plaza Hotel.doc , , . , .~. CITY OF MIAMI BEACH 1700 Convention Center Drive, Miami Beach, Fl. 33139 http:\\cI.mlami-beach.f1.us Miami Beach Redevelopment Agency Telephone (305) 673-7193 Facsimile (305) 673-7n2 March 14, 2002 RE: Summary Royal Palm Outstanding Issues The purpose of this memorandum is to outline several outstanding issues related to the Royal Palm Crowne Plaza project. In summary they consist of the following and are more thoroughly described below: . Demolition and Reconstruction of the Royal Palm - Developer is requesting a credit to the Purchase Price due to expense incurred for demolition/reconstruction. City contends property was leased "as is" with no warranties or representations. . Petroleum Contamination Claim - Claims totaling $146,333 have been paid pursuant to Indemnification Clause. A third claim for a $14,611 was rejected. . Delay Claims - Claims for 488 day delay totaling $836,058 have been submitted to the City but not yet settled. Developer has not provided access to contractor's daily reports. . Ground Rent - Developer has failed to pay Additional Rent since August 2000 and is only paying 50% of Base Rent, claiming Unavoidable Delay. The extent of time of the Unavoidable Delay has not yet been determined. . Construction Commencement Date and Hotel Opening Date - Dispute over the Construction Commencement Date being August 1998 vs. October 1998 which affects rent payments and hotel opening date. . Financial Concessions - A concession package to settle the Delay Claim was negotiated in July 1999 and Developer rejected City's proposal. . Prepayment of Land - Land Purchase price is $10 million and Developer wants a credit for Delay Claim and reconstruction costs and proposes to purchase on a present value basis. . Default Notice pursuant to the Hotel Management Agreement - Hotel Management Company defaulted Developer and no notice of default being cured has been received by City, despite City's request for same. . Excess Owner Contribution - City maintains Developer must reimburse RDA for any contribution in excess of $10 million, estimated at $2,102, 174. . Hotel Restaurant - RDA must approve Restaurant operator before Hotel Opening Date. Developer has not yet submitted same for approval. . Anchor Garage Easement Agreement - Rate structure negotiated between the Loews and City must be agreed to between RDP and the City. . Construction Easement - City facilitated negotiations for easement to accelerate construction by 120 days. Royal Palm Outstanding Issues January 31, 2002 Page 20f8 1) Demolition and Reconstruction of the Royal Palm On October 20, 1998, the Royal Palm was officially declared structurally unsound, resulting in its eventual demolition and a replica built in its place. RDP Royal Palm (Developer) maintains that it was never allowed to inspect the building prior to executing of the Development Agreement. Throughout the RFP process and subsequent negotiations, the Developer and its architectural and engineering team had access to the Royal Palm. As RDP was not the property owner, invasive testing was not requested prior to closing, however it is not inconsistent with standard real estate practices. Furthermore, the Developer executed the Development and Lease Agreements which clearly relieve the RDA of any legal liability to the Developer for the condition of the Royal Palm Hotel. There are two primary documents that govern the relationship between the Miami Beach Redevelopment Agency (the "Agency"), and RDP Royal Palm Hotel Limited Partnership (the "Developer"), the developer of the Hotel. These are the Ground Lease and the Hotel Development Agreement. The Agency owns the land underlying the Hotel. Title to the buildings on the land was transferred to RDP by Special Warranty Deed on May 28, 1998. Section 5.1 of the Hotel Development Agreement provides, in part, that: "The Owner has not made and does not make any representations as to the physical or structural condition. value. adeQuacy or fitness for use of any eQuipment or systems in the ExistinQ Hotels, or the presence on or about the Existing Hotels of any substance or material which is or may hereafter be subject to any Environmental Laws, including, without limitation, Hazardous Materials, or any other matter or thing affecting or related to the Existing Hotels, and Developer herebY expressly acknowledoes that no such representations have been made. and Developer further acknowledoes that it has inspected the Existino Hotels and aorees to take the same as is. in such condition as the same may be in on the date of delivery of the deed thereto." [emphasis added] The Section 18.2 of the Ground Lease provides, in part, that: "Tenant accepts the Premises in existino condition and state of repair and Tenant confirms that: except for the representation contained in Section 18.1 (and any other representation expressly set forth in this Lease), (i) no representations. statements, or warranties. express or implied. have been made by. or on behalf of. Owner with respect to the Premises or the transactions contemplated by this Lease, the status oftitle thereto (except as set forth in Exhibit 2.1 attached hereto and incorporated by reference herein), the physical condition thereof (including but not limited to subsurface conditions),...... [emphasis added] Section 18.1 and Exhibit 2.1 are not relevant to the condition of the property. The City Attorney has advised that these sections of the documents, and other factual and legal Royal Palm Outstanding Issues January 31,2002 Page 30f8 matters, indicate that the RDA does not have any legal liability to the Developer for the condition of the Royal Palm Hotel. 2) Petroleum Contamination Claim During the course of excavating the foundations for the Royal Palm, two areas of petroleum-contaminated soil were uncovered by Clark Construction (Contractor). In accordance with the indemnification clause in Section 35 of the Hotel Development Agreement between the Redevelopment Agency and RDP Royal Palm Hotel, LP, (Developer), the Developer submitted two separate claims for reimbursement of the costs associated with the remediation of the contaminated fill, totaling $178,038. Pursuant to an analysis of the claims, the RDA has authorized the reimbursement of $146,333.59 to date. A third claim in the amount of $14,611 was rejected for lack of adequate justification. 3) Delay Claims The Developer is claiming construction delays stemming from the soil contamination, comprising 42 days and structural deficiencies, necessitating the demolition and rebuilding of the seven-story Royal Palm, totaling 184 days, per the developer's records. The Developer is also claiming an additional 262 days in structural delays as a result of City's plan approval/permitting process. The only claim to have a dollar amount associated with it is the 42-day soil-contamination claim, for which the Developer is claiming $836,085. In correspondence dated June 24, 1999, the City Attorney denied any liability for the delay claim. As indicated in earlier reports to the RDA Board, outside counsel and consultants have been retained to determine the extent (if any) of the City/Agency's exposure/liability with respect to the Developer's claims. Extensive documentation, including but not limited to critical path schedules, contractor and sub-contractor daily reports and contractual and insurance documents were requested of the Developer. While most of these documents were delivered, the Contractor has refused to make available its sub-contractor daily reports, which the City's consultants believe will reflect certain concurrent delays (unrelated to the contamination), which the Contractor has included in the claim. A final determination as to any merit of the delays claimed may not be possible until the end of the project. With respect to the Developer's claim for the structural revisions, the Building Department made every effort to review the plans as expeditiously as possible, considering that there were over 40 meetings required with the Structural Inspector alone between April and December, 1999. Partial revisions to the structural drawings were submitted on a floor-by- floor basis due to significant deficiencies in the design of the post-tension system. 4) Ground Rent The Rent Commencement was to occur on the earlier of (1) the Hotel Opening Date or (2) the date which is twenty-four (24) months after the Construction Commencement Date. To date, the Hotel has not opened and the twenty-four (24) months has elapsed. The Lease Agreement however, also provides for the Developer to begin paying the RDA Base Rent, (in the amount of $220,000 per year) and Additional Rent (in the amount of $270,000 per year), on the earlier to occur of the (1) the Hotel Opening Date or (2) the date which is l '. '. Royal Palm Outstanding Issues January 31, 2002 Page 4 of 8 twenty-four (24) months after the Construction Commencement Date. The Lease Agreement also provides for the Developer to only pay 50% of the Base Rent and Additional Rent in the event of an Unavoidable Delay for a period equal to the period of the Unavoidable Delay. In accordance with this provision, and as indicated previously, the Developer has claimed Unavoidable Delays on account of the contaminated soil and structural modifications due to the replacement of the 7 -story tower, for a total a total of 488 days as follows: Soil Contamination Structural (demo & reconstruction) Structural (plan review) 42 days 184 days 262 days Total: 488 days On October 30, 2000, the Developer began remitting monthly payments of $9,167, (equivalent to 50% of the Base Rent), based upon an October 30 Commencement Date, which the RDA has not agreed is the Construction Commencement Date as described below. However no payment of Additional Rent has been made to date, and the Developer was noticed on January 10, 2002 to remit such payments by month end. The RDA has also not acknowledged the extent and/or validity of the delay claim. Therefore, the Rent Commencement Date and the extent of the unavoidable delay must still be ascertained and agreed to. A Notice of Default was issued to the Developer for failure to remit rent for August and September, 2000. Notwithstanding the reduction to rent for unavoidable delays, the full amount of Base Rent and Additional Rent is due and payable the date which is 42 months after construction commencement which would be February 2002. 5) Construction Commencement Date and Hotel Opening Date Pursuant to the Development Agreement, the Developer has forty-two (42) months from the Construction Commencement date to complete the Project. The RDA and Developer have not yet agreed to the Construction Commencement Date. The RDA maintains that Construction Commencement occurred on August 4, 1998, (Groundbreaking Day), based upon the fact that a foundation permit was issued to the Contractor on July 10, 1998, and that building demolition shoring/bracing, test piles and production piles were proceeding as of the beginning of August, 1998. The Developer contends that Construction Commencement occurred on October 30, 1998, sixty days after issuance of the DEP/CCL permit. Based on an August 1998 Construction Commencement Date February 2002 is the deadline for construction completion. As stated above, Base Rent and Additional Rent are due in full commencing February 2002. On January 10, 2002, the City requested the Developer advise us, in writing, of the projected Hotel Opening Date for the Hotel. Royal Palm Outstanding Issues January 31, 2002 Page 50'8 6) Financial Concessions As a result ofthe unexpected demolition and replacement ofthe Royal Palm, the developer claimed economic hardship due to the alleged increase in construction costs associated with the reconstruction of the 7 ~story tower as well as the construction delays associated with the protracted pre-development schedule for the hotel. In order to leverage additional financing for the project, the developer approached the City/RDA requesting a deferral of annual ground lease payments for 25 years and abating payment of the Use Fee for its share of parking spaces in the 16th Street Garage. Since the RDA's debt service obligations preclude any concessions on payment of the ground lease, the Administration informed the developer that the only option available for consideration was the abatement of the garage Use Fee in exchange for the RDA not paying the developer the facility Usage Fee. An agenda item was prepared for July 1999 City Commission consideration which the Developer requested be withdrawn. The Developer rejected the proposal. 7) Prepayment of Land Article 36 outlines the Purchase of Owner's Interest in the premises by Tenant and provides for a Voluntary Purchase or a Mandatory Purchase at the $10 million aggregate purchase price ($5.5 million for the Royal Palm and $4.5 million for the Shorecrest). The Mandatory Purchase must occur at the earlier of a Sale of the Hotel or the expiration of 25 years from the Hotel Opening Date. Said purchase price of $10 million is subject to an annual 8% return commencing on the Hotel Opening Date. The 8% return is partially offset by a provision to credit the Tenant for base, additional and incentive rent paid to date by the Developer against the purchase price. Notwithstanding, the voluntary purchase price is set at $10 million and the Agreement does not provide for any discount on this purchase price for early payment. Purchase of the premises prior to Hotel Opening Date would mean that the Developer forgo payment of the 8% return to the City. 8) Default Notice pursuant to Hotel Management Agreement On December 7, 2001 the City received notice of the second default under the Management Agreement from Town Park Hotel Corporation. On January 10, 2002, the City asked the Developer to provide the City with notice of its cure of such default. To date, the Developer has not provided such notice. In Article 16 of the Agreement of Lease between Miami Beach Redevelopment Agency (the "Agency"), and RDP, dated as of May 28, 1998 (the "Lease"), RDP covenanted to "cause the Hotel to be operated and managed exclusively by the Hotel Manager in accordance with the terms and conditions of this Lease, including, without limitation, Article 6 and this Article, pursuant to a written Management Agreement providing for services, and containing terms and conditions, reasonable and customary for the operation of a first class convention center hotel in accordance with the terms of this Lease." I Royal Palm Outstanding Issues January 31, 2002 Page 60'8 Under Section 25.1 (b) ofthe Lease, "Event of Defaulf is defined, among other things, as a "default in the observance or performance of any term, covenant or condition of this Lease on Tenant's part to be observed or performed (other than the covenants for the payment of Rental or as expressly set forth below) and Tenant shall fail to remedy such Default within thirty (30) days after notice by Owner of such Default (the "Default Notice"), or if such Default is of such a nature that it cannot reasonably be remedied within thirty (30) days (but is otherwise susceptible to cure), Tenant shall not (i) within thirty (30) days after the giving of such Default Notice, advise Owner of Tenant's intention to institute all steps (and from time to time; as reasonably requested by Owner, Tenant shall advise Owner of the steps being taken) necessary to remedy such Default (which such steps shall be reasonably designed to effectuate the cure of such Default in a professional manner), and (ii) thereafter diligently prosecute to completion all such steps necessary to remedy the same". The Agency should treat any termination of the Management Agreement as a default under the Lease, unless such termination is cured within the applicable time period set forth above. Again, to date, no notice of such cure has been received by the City. 9) Excess Owner Contribution Article 6, Section 6.1.{d), of the Development Agreement provides for the Owner's Total Contribution not to exceed $10,000,000, except as provided in Section 6.3 , which outlines the Owner's obligation to pay City and Non-City permit fees. Article 6 does not reference costs incurred pursuant to the indemnification clause. To date, the RDA has paid $12,575,576 of which $12,102,174 does not include permit fees, RFP costs, and indemnity costs. Therefore, the Developer should reimburse the Owner for $2,102,174 of additional contributions not provided for in the Agfeement representing the Owner's contribution above $10 million. Additionally, $121,743 has been paid in remediation costs. 10) Hotel Restaurant Pursuant to Article 33 of the Lease, the Restaufant in the Shorecrest Hotel must be open to the public fOf business within 120 days of the Hotel Opening Date. Inasmuch as Article 33 requires that selection of the Restaufant and Restaufant Operatof shall be subject to approval of the Agency, we have asked the Developer on January 10, 2002 to advise us, in writing, as to your progress in securing a Restaurant Opefator. 11 )Anchor Garage Easement Agreement Rate Structure The fate structure in effect at the Anchor Garage was developed in accordance with the parameters established in the Gafage Easement Agreement, to provide sufficient gross revenues to cover operating and maintenance costs, debt service and fevenue sharing obligations of the facility. Consideration was also given to providing competitive short-term daily rates and weekend and evening flat fates to encourage public use of available spaces when shopping, dining, doing business Of attending events in the area. The rate structufe provides for a rate of $2.00 for the first hOUf, $4.00 fOf up to 2 hours, $10.00 for up to 6 ,. Royal Palm Outstanding Issues January 31, 2002 Page 70'8 hours and $18.00 for up to 24 hours. In order to arrive at the daily self-park rate, two factors were considered: the parking rates charged by select hotels in the area, including the Loews Hotel, and the rates needed to be charged to the Loews and the Crowne Plaza for use of the spaces in the garage. Pursuant to the terms of the Easement Agreements, the RDA cannot charge Loews or Crowne Plala more than 50 percent of the established self-park rate (per space) for use of their spaces. To this day, Loews and the Administration have differences over the interpretation of the "Self-park" rate as defined in the Agreement. Since the opening of the garage, the RDA has been charging Loews $9.00 per space, or 50 percent of the daily self- park rate of $18.00. Loews contends that they should be paying 50 percent of the hourly rate and not necessarily 50 percent of the daily self-park rate. Both Loews and the Administration agree however, that due to the logistical complications in tracking usage of the spaces on an hourly basis, paying a flat rate for the highest number of spaces used per day, coupled with an access card multiple-part ticket system was the most viable solution. Revenue Sharina Obliaations Under the terms of the easement agreement with Loews for use of the garage, Loews is entitled to the use of 560 spaces for which the RDA receives an up-front annual use fee of $580,000, in addition to paying parking charges for their use of spaces at a rate not to exceed 50 percent of the established self-park rate for each space used for valet operations. Under a separate easement agreement between the RDA and RDP Royal Palm Hotel, Ltd., ("Crowne Plaza"), a similar formula was applied. For use of 174 spaces, Crowne Plaza will pay $156,600 annually up-front as a use fee, in addition to parking charges for each space used at the same rate as Loews. The hotels are required to provide 24 hour notice to reserve the spaces for their use for valet parking of hotel guests or for events. The 69 remaining spaces plus any spaces not reserved by the hotels will be available for public parking. The Easement Agreements also provide for Loews and Crowne Plaza to share in the gross revenue stream generated by the garage on the basis of a two-tiered system. In the first tier, the hotels receive a percentage of gross revenue, up to their respective annual use fees, calculated as 41.7 percent of the first $1,390,000 in gross revenues for Loews and 13.05 percent of the first $1,200,000 in gross revenues for Crowne Plaza. In the second tier, Loews receives 28 percent of gross revenues in excess of $1,390,000 and Crowne Plaza receives 6.46 percent of gross revenues over $1.2 million. In essence, the first-tier is intended as a credit against the annual use fee. 12)Construction Easement The Administration went to great lengths to facilitate construction access to the Developer's site. Two options were pursued extensively, including access via the City's right-of-way at 15th Street and use of the Public Pedestrian Easement Area 'at 16th. . Street, located between the Royal Palm and the Loews Hotel properties. Since initial negotiations between Loews and the Royal Palm failed to produce an agreement for use of the 16th Pedestrian Easement Area, the Administration sought to allow construction vehicles to access the Royal Palm via the cul-de-sac at 15th Street. Due to the negative response by II Villagio and Ocean Steps Condominiums, the ~ Royal Palm Outstanding Issues January 31, 2002 Page 80f8 Administration was directed by the Commission to seek a renewal of the negotiations between the Loews and the Royal Palm to agree on a mutually acceptable use of the 16th Street access route. The Administration coordinated a series of meetings to renegotiate the conditions of an agreement with the two parties, to access the Royal Palm construction site for construction material and equipment deliveries and unloading through the 16th Street Public Pedestrian Easement Area, to expedite the Hotel's construction schedule. As a result of the negotiations, a License Agreement was executed on May 1, 2000, allowing Royal Palm to utilize the Easement Area for construction related purposes for a period that shall terminate on the earlier of (a) the issuance of a certificate of occupancy for the Royal Palm Hotel or, (b) March 31, 2001, plus sixty days for completion of the improvements to the Easement Area. The improvements to the Easement Area are to consist of decorative interlocking pavers, landscaping, irrigation, lighting, and other decorative features. In order to minimize the impact to Loews, the proposed Agreement contains certain mitigation provisions, including the ability for Loews to assess liquidating damages for the amount of time that the project exceeds the termination date. Even though the project has exceeded the March 31, 2001, deadline, by seven months and counting, Loews has not exercised this option. It should be noted, that according to the Royal Palm, the Agreement allows them to save approximately one hundred and twenty (120) days off the developer's anticipated construction schedule. F:\CMGR\$ALL\CHRISTIN\RDA\royalpalmstatsummary .doc Revtsed 3/13102 0~/13/20af 08:56 385-441-2487 LU<IS BALSERA, LLC . ROY AL PALM CROWNE PLAZA RESORT Lease Modification Issues Issue Document 11 Envlronmflnr.1 Claim Immodla1e Settlement of the Environmental Claim for Conwminated SOIl for 42 days delay Ground Lease 2] Clsrlfication/MOdlfiClflion of Lease to ProVide tor Fufl 99--y,yr Term Remove reQuirement for oayment of Purchase Price aftar 25 years G round Le~se R9move requirement for applications of excess refInancing proceeds to apply towards payment oi Purchase Price Ground Lease Remove requirement for CIty review and approval of refJnancings Ground Lease 3] Shoref;"$t Restaurant Requirements Remove all requirements p8rte.inlng 10 Shorecrest R.estaurant space Ground Lease 4J Permit Condominium Hotel Ownership Structures Remove restrlction Which prohibits alternative Ownership structuras such as CondQminlums Ground Leasca Remove tM requirement that the ShorecrQst and Royal Palm be managed by only one manager. Ground Lease Modify the grant of security interest in FFE account to the ~ity Ground Laue 5] Modify/Allow for Buy-Out of Crowne PIIIZfI', Inccte$t Incorporate amendments which allow tor buy~out of Crowne PJazaJV Interests. Grouna Lease Modify tenants rights to tenninate Management Agreement and replace wtth new Manager with a term that exceeds the i"itial term 01 the Crowne Plaza Agreement Groul1d Leese -^ . ... ... ... ... "..1'....1' 11'''' ,.. ^ 'D J ... ^ 1 Clt~ SectIon 35.3 Section 10.1 (h) 36(c)(ii) SectIon 11.13{b}(i) Section , 1.1 3(c lei) Section 10.1(a)(J\/)C 10.2 {d). 33 Section 6.1 (b) 6.2 (a)(lv). 10.' (e) Section 13.3 (b), 16.8 Section 14.2 (a) 22 & 24.9 Section 16.7 (e) SectiOn 1$.2, 16.3 FROM:395 441 2487 PAGE 03 ~002 P&S I \ t;3i13/2ea, 0S: 56 LUKIS BtLSERA, LlC 305-441-2487 .. Royal Palm Crown Plaza R"ort Lease Modlflcation Issues Page 2 6J Deter Rents until SettJemf/llt of Other Claims /sa:uf/$ D.ier all Base and Additional Rents incurred prior to Hotel Opening penellng resolution of othor matters Ground Lease WaiVer of all late Charges on Deferral of Base & AddItional Rents 7) Other Administratfv.lAodif~tions Modify Discharge of Liens sections Ground Lease Ground Le&8& Development Agmt Remove rOQuirements associated with Excess Owner Contributions Development Agml 93-13-82 11:98 TO:MILLENNIUM CAPITAL PA<;E 134 IGI V\I.) Section 3.2 (a) and 3.3 (a) Soction 4 Section 17.2 & 24.2 (a) Section 2.3{b)(iij) & (v) 14.1(a). 14.2 (a) and Section 6.1 (d) 18.2 (8) FROM:385 441 2487 P94 .' :) Miami Beach Redevelopment Agency 1700 Convention Center Drive, Miami Beach, FI. 33139 http:\\cLmiami-beach.f1.us Miami Beach Redevelopment Agency Telephone (305) 673.7193 Facsimile (305) 673.7772 March 20, 2002 TO: Christina M. Cuervo, Assistant City Manager FROM: Kent O. Bonde, Redevelopment Coordinator RE: Royal Palm - Summary of Defaults, Potential Defaults, and Disputes DEFAULTS UNDER LEASE AGREEMENT 1) Failure to pay Base Rent (only 50% paid from Oct 2000 to Nov 2001) 2) Failure to pay Additional Rent 3) Tenant has failed to provide Certificates of Tenant (per Article 27) stating that no changes have been made to its partnership agreement; that the Substantial Controlling Interest in Tenant is owned by African-American Persons; and outlining the obligation of the Tenant's partners to fund operating deficits and Tenant's partners' obligations to each other. DEFAULT UNDER DEVELOPMENT AGREEMENT 4) Developer has failed to provide a certificate of the Architect regarding Substantial Completion, lien waivers, a complete set of "as built" plans and a survey, Contractor's Final Affidavit, and evidence that all required FF&E has been installed. POTENTIAL DEFAULTS UNDER THE LEASE AGREEMENT 5) Tenant must open a restaurant in the Shorecrest Hotel within 120 days of the Hotel Opening Date. Tenant has not responded to our 1/10/02 request for information regarding its progress in securing a Restaurant Operator. 6) We have no evidence that tenant has been pa~ng sales tax on rent. 7) Property taxes for 2001 in the amounts of $92,159.12 plus $102,106.30 will be delinquent on April 1 , 2002 and no e\4dence of payment has been made. 8) There is no evidence of insurance in our records. OUTSTANDING DISPUTES . Demolition and Reconstruction of the Roval Palm - Developer is requesting a credit to the Purchase Price due to expense incurred for demolition/reconstruction. City contends property was leased "as is". . Petroleum Contamination Claim - Claims totaling $146,333 have been paid pursuant to Indemnification Clause. A third claim br $14,611 was rejected. . Delav Claims - Claims for a 488 delay totaling $836,058 have been submitted to the City but not yet settled. Developer has not provided access to contractor's daily reports. . Construction Commencement Date and Hotel Ooening Date - City has determined date of Construction Commencement to be August 4, 1998 -- the date of the Ground Breaking Ceremony. . Financial Concessions - A concession package to settle the Delay Claim was negotiated in July 1999 and Developer rejected City's proposal. . Preoavment of Land - Land Purchase price is $10 million and Developer wants a credit for Delay Claim and reconstruction costs and proposes to purchase on a present 'lBlue basis. . Excess Owner Contribution - City maintains Developer must reimburse RDA for any contribution in excess of $10 million, estimated at $2,102,174. . Anchor Garaae Easement Aareement - Rate structure negotiated between the Loews and City must be agreed to betv.een RDP and the City. . Unavoidable Delavs - City and Developer have not agreed to the extent an unavoidable delay(s) has occurred. This affects the Base Rent and Additional Rent, both of which may be reduced to 50% for the period of time such unavoidable delay occured.