Resolution 2018-30337RESOLUTION NO.
2018 -30337
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, APPROVING, IN SUBSTANTIAL
FORM, A LETTER AGREEMENT BETWEEN THE CITY, AS OWNER OF
500 PARKING SPACES, AND FIFTH & ALTON (EDENS), LLC
(EDENS), AS OWNER OF 587 PARKING SPACES, ALL LOCATED IN
THE PARKING GARAGE OF THE 5TH & ALTON CONDOMINIUM,
RELATING TO THE ACCELERATED REPLACEMENT OF THE
ORIGINAL GARAGE EQUIPMENT WITH NEW /UPGRADED
EQUIPMENT, HAVING A COST OF APPROXIMATELY $400,000, AND
PROVIDING FOR EACH PARTIES' RESPECTIVE PAYMENT
OBLIGATION; AND FURTHER AUTHORIZING THE CITY MANAGER
TO EXECUTE THE LETTER AGREEMENT.
WHEREAS, on May 18, 2005 the City entered into a development agreement
with the developer, AR &J SOBE, LLC, setting forth each parties' responsibilities with
regard to the development, design, construction, ownership and operation of a multi-
level commercial building (the Project), including grocery, retail, office and restaurant
space, and a parking garage (the Garage); and
WHEREAS, pursuant to the development agreement, in addition to monetary
considerations for the construction of the Garage, the City contributed a right of way
easement to an alley, which the City had declared a Brownfield Area, and the developer
contributed its adjoining parcel of land so that the Project could be developed in the
form of a condominium; and
WHEREAS, on December 29, 2009, the developer submitted his land to the
condominium form of ownership through the execution (and subsequent recordation) of
the Declaration of 5th & Alton Condominium (the Declaration), setting forth the City's and
Developer's respective rights and responsibilities with regard to the ownership and
operation of the Project; and
WHEREAS, the City is the owner of the City Controlled Units (as defined in the
Declaration), which includes 500 parking spaces in the Garage; and
WHEREAS, the developer is the owner of the Developer Controlled Units (as
defined in the Declaration), which includes 587 parking spaces in the Garage; and
WHEREAS, the City desires to replace the original Garage equipment in order to
update the system, consistent with the technology currently being used by the other City
garages, and to ensure that the Garage equipment may continue to be supported; and
WHEREAS, pursuant to Section 10.2 of the Declaration, the replacement cost of
the equipment shall be allocated as an "operating expense" of the Garage; and
WHEREAS, pursuant to Section 10.5(c) of the Declaration, the proportionate
share of the operating expenses for the Garage is allocated in proportion to the number
of total parking spaces owned by the City and the Developer, which results in the City
paying for forty -six percent (46%) of the operating expenses and the Developer paying
for fifty -four percent (54 %); and
WHEREAS, the total cost of the new Garage equipment is approximately
$395,921.68 and each parties' payment responsibility would be as outlined below:
Developer $213,797.71 (54 %)
City $182,123.97 (46 %)
Total Cost $395,921.68 (100 %)
WHEREAS, since the equipment will be replaced earlier than the average useful
life of the equipment, due to the City's desire to centralize and standardize all garage
operation, the City has agreed to credit Developer a straight line depreciation amount
(based upon a twelve and one half (12.5) year average useful life) of the developer's
share of the purchase price of the original Garage equipment, in the total sum of
$122,777; and
WHEREAS, this credit results in a reduced contribution by the Developer of
$91,020.71, which will be payable in six and a half (6 1/2) annual payments,
commencing at the end of the Original Equipment repayment schedule, on January 1,
2025; and
WHEREAS, the Administration recommends the approval, in substantial form, of
the letter agreement (attached to the City Commission Memorandum accompanying this
this Resolution), memorializing the agreement between the parties.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby approve, in substantial form, a letter agreement between the City,
as owner of 500 parking spaces, and Fifth & Alton (Edens), LLC (Edens), as owner of
587 parking spaces, all Located in the parking garage of the 5th & Alton Condominium,
relating to the accelerated replacement of the original garage equipment with
new /upgraded equipment, having a cost of approximately $400,000, and providing for
each parties' respective payment obligation; and further authorize the City Manager to
execute the letter agreement.
PASSED and ADOPTED THIS li day of ■u122
ATTEST:
Rafael E. Granado, City Clerk
2018.
e' YDark e e r, Mayor
.INCCRP CRATED
APPROVED AS TO
FOR►4.: ► -y` NGUAGE
�'''Or ,ECUTION
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City Attorney
MIAMIBEACH
City of Miami Beach, 1755 Meridian Avenue, Suite 200, Miami Beach, Florida 33139, www.miamibeachfl.gov
TOURISM, CULTURE AND ECONOMIC DEVELOPMENT DEPARTENT
Office of Real Estate
Tel: 305 - 673 -7193 / Fax: 786- 394 -4539
May 15, 2018
Sent Via E -mail: imclean(cr�edens.com & Fedex Tracking No. 8120 5591 5282
Ms. Jodie W. McLean, Manager
Edens GP, LLC, as general partner of Edens Limited Partnership
1221 Main Street, Suite 1000
Columbia, SC 29201
3033'7
Re: Declaration of Condominium of 5th & Alton Condominium, recorded in Official
Records Book 27133, at Page 4420, of the Public Records of Miami -Dade
County, Florida (the "Declaration "); 5th & Alton Condominium Association, Inc.
(the "Condominium Association "), which consists of a multilevel
commercial /office /retail space and parking garage (the "Garage "); City of Miami
Beach, Florida (the "City "), as owner of the City Controlled Units (as defined in
the Declaration); Edens Limited Partnership, as Manager /Owner of Fifth & Alton
( "Edens ") f /k/a AR &J Sobe, LLC ( "Developer "), as owner of the Developer
Controlled Units (as defined in the Declaration); Cover Letter relating to the
replacement of the original Garage equipment.
Dear Ms. McLean:
For the past year, the City and Developer have been communicating in an effort to
reach an agreement with respect to the replacement of the original Garage equipment,
as said equipment was installed in 2009 and is not compliant with the Payment Card
Industry Data Security Standards (PCI). Developer has unreasonably delayed the
replacement of the Garage equipment by failing to agree to pay for its share of the cost
of the new Garage equipment as part of the operating expense of the Garage. The
original Garage equipment is obsolete. To modify the original equipment so that it
meets the current guidelines provided for PCI compliance, with no guaranty that the
equipment could be updated or maintained in the future, would cost approximately
$80,000.
Pursuant to the Declaration, the City operates the Garage equipment, including the
payment processing operations for the Garage. If the Garage operation is found to be
non - compliant, the City may be assessed fines. In such case, the City will pass on any
such assessments to the Garage operations, as part of the operating expenses and the
City and Developer will each be proportionately responsible for said expenses, as joint
owners of the Garage.
Cover Letter to Developer
5th and Alton Condominium
Page 12
Additionally, pursuant to Section 10.1 of the Declaration, the City is required to operate,
and the Developer is required to maintain and replace, the Garage equipment, in no
less than the standards maintained in municipal parking garages that are operated by
the City elsewhere within Miami Beach. The City has installed new garage equipment
in the remainder of the City Garages, which are PCI compliant and have a maintenance
plan for a period of ten years, and this garage is the only one that is not being operated
up to this standard.
Attached is a letter agreement, based upon terms which Developer's representatives
have expressed would be acceptable, providing the Developer with a credit, based upon
the remaining useful life of the original equipment (using an agreed upon useful life of
12.5 years), and permitting the Developer to pay the balance of its share of the new
equipment purchase cost, upon completion of the payments for the original Garage
equipment, subject to approval at the next City Commission meeting.
If the attached proposal is acceptable, kindly execute and return to the undersigned by
end of business day on Friday, May 18, 2018 so that a City Commission agenda item
may be placed for the June 6, 2018 City Commission meeting; otherwise, the City will
stop processing credit card payments and only accept cash transactions, effective June
1, 2018, until such time as the PCI compliance issue has been addressed.
Should you have any questions, please do not hesitate to contact the undersigned.
Sincerely,
--;-3—'r----
eather Shaw, Assistant Director
for Eva Silverstein, Director
c: Via E -Mail:
Jimmy Morales, City Manager
Kathie Brooks, Assistant City Manager
Gisela Nanson Torres, Senior Assistant City Attorney
Saul Frances, Parking Department Director
Mark Milisits, Real Estate Division Director
Nicole Shiman
Elias Droubi
f: \nccd \$all \econ \$all \asset \5th and alton garage\ letteragreementequipment 5 -15 -2018 cover letter,docx
We are committed to providing excellent public service and safety to all who live, work, and play in our vibrant, tropical, historic community.
MIAMI BEACH
City of Miami Beach, 1755 Meridian Avenue, Suite 200, Miami Beach, Florida 33139, www.miamibeachfl.gov
TOURISM, CULTURE AND ECONOMIC DEVELOPMENT DEPARTENT
Office of Real Estate
Tel: 305 - 673 -7193 / Fax: 786- 394 -4539
May 15, 2018
Ms. Jodie W. McLean, Manager
Edens GP, LLC, as general partner of Edens Limited Partnership
1221 Main Street, Suite 1000
Columbia, SC 29201
Re: Declaration of Condominium of 5th & Alton Condominium, recorded in Official Records Book 27133, at
Page 4420, of the Public Records of Miami -Dade County, Florida (the "Declaration"); 5th & Alton
Condominium Association, Inc. (the "Condominium Association "), which consists of a multilevel
commercial /office /retail space and parking garage (the "Garage "); City of Miami Beach, Florida (the
"City "), as owner of the City Controlled Units (as defined in the Declaration); Edens Limited Partnership,
as Manager /Owner of Fifth & Alton ( "Edens ") f /k/a AR &J Sobe, LLC ( "Developer "), as owner of the
Developer Controlled Units (as defined in the Declaration); Letter Agreement relating to the
replacement of the original Garage equipment.
Dear Ms. McLean:
The following shall serve to memorialize the parties understanding and /or agreement with respect to the
following matters:
RECITALS:
Whereas, the City and Developer desire to replace the original Garage equipment, in order to update
the system, consistent with the technology currently being used by the other City garages, and to ensure that
the Garage Equipment is compliant with the Payment Card Industry Data Security Standards (PCI); and
Whereas, pursuant to Section 10.2 of the Declaration, the replacement cost of the equipment shall be
allocated as an "operating expense" of the Garage; and
Whereas, pursuant to Section 10.5(c) of the Declaration, the proportionate share of the operating expenses
for the Garage is allocated in proportion to the number of total parking spaces owned by the City (500 parking
spaces) and the Developer (587 parking spaces) as to the total number of parking spaces own by the parties
(1,087), which results in the City paying for forty -six percent (46%) of the operating expenses and the
Developer paying for fifty -four percent (54 %); and
Whereas, the new Garage equipment, will be purchased pursuant to the City's agreement with Skidata,
Inc., dated October 15, 2015 (the "Skidata Agreement "); and
Whereas, the City and Developer's respective share of the expense of the new Garage equipment
installation is as follows:
Total Cost: $395,921.68
Developer: $213,797.71 (54 %)
City: $182,123.97 (46 %); and
Whereas, since the equipment will be replaced earlier than the average useful life of the equipment, due, in
part, to the City's desire to centralize and standardize all garage operations, the City has agreed to credit
Developer the straight line depreciation amount (based upon a twelve and a half (12.5) year average useful
life) of the developer's share of the purchase price of the original Garage equipment, in the total sum of
Letter Agreement between City and Developer
5th and Alton Condominium
Page 12
$122,777, as more particularly set forth in the New Equipment Payment Schedules, incorporated herein by
reference and attached as Exhibit "A" hereto; and
Whereas, pursuant to the Skidata Agreement, the new Garage equipment will have a ten year
maintenance plan for a total sum of $341,409.46, which shall be paid as part of the operating expenses of the
Garage.
NOW, THEREFORE, in consideration of the above recitals and the promises, agreements and releases
contained herein, as well as for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties acknowledge and agree as follows:
1. The above recitals are incorporated herein by reference. Unless otherwise defined herein,
defined terms (as indicated by an initial capital letter) shall have the meaning ascribed to them in the
Declaration.
2. Developer agrees to pay its agreed upon share of the new Garage equipment, in the amount of
approximately $91,020.71, in six and a half (6 %) annual payments, commencing on January 1, 2025, as
follows:
January 1, 2025 $14,003.19
January 1, 2026 $14,003.19
January 1, 2027 $14,003.19
January 1, 2028 $14,003.19
January 1, 2029 $14,003.19
January 1, 2030 $14,003.19
July 1, 2030 $7,001.57
Your counter- signature below shall indicate your agreement and acknowledgement to the above referenced
terms and conditions. Please execute three originals and return them to my attention, as follows:
Eva Silverstein, Director of Tourism, Culture and Economic Development
City of Miami Beach
Attn: Office of Real Estate
1755 Meridian Avenue, Suite 500
Miami Beach, FL 33139
Upon securing the approval of the City Commission and signature of the City, one fully signed original will be
returned to you for your records.
Should you have any questions, please do not hesitate to contact me.
Heat ,er Shaw, Assistant Director
for Eva Silverstein, Director
c: Via E -Mail:
Jimmy Morales, City Manager
Kathie Brooks, Assistant City Manager
Gisela Nanson Torres, Senior Assistant City Attorney
Saul Frances, Parking Department Director
Mark Milisits, Real Estate Division Director
Nicole Shiman
Elias Droubi
We are committed to providing excellent public service and safety to all who live, work, and play in our vibrant, tropical, historic community.
Letter Agreement between City and Developer
5th and Alton Condominium
Page 13
TERMS ACKNOWLEDGED AND AGREED TO BY:
BY:
CITY OF MIAMI BEACH
Attest:
Jimmy L. Morales, City Manag
THIS 0q DAY OF
EDENS GP, LLC
BY:
,J Uri Z(..)
el E. Granado, City Clerk
THIS le) DAY OF
, 2018
f: \nccd \$all \econ \$all \asset \5th and alton garage \letteragreementequipment 5- 15- 2018.docx
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
City Atto
1
Dote
We are committed to providing excellent public service and safety to all who live, work, and play in our vibrant, tropical, historic community,
EXHIBIT
A
New Equipment Credit Balance Calculation
Repayment Balance:
Depreciation Method:
Useful Life:
Quarterly Depreciation:
Credited Useful Life Quarters:
Credit Balance Towards New Equipment:
453,317
Straight Line
12.5 Yrs
9,444
13
122,777
Period
Stat Book Value
Depreciation Amount
Accumulated
Depreciation; Amount;
End Book Value
1/1/2010
$453,317
$9,444
$9,444
$443,873
4/1/2010
$443,873
$9,444
$18,888
$434,429
7/1/2010
$434,429
$9,444
$28,332
$424,985
10/1/2010
$424,985
$9,444
$37,776
$415,541
1/1/2011
$415,541
$9,444
$47,220
$406,097
4/1/2011
$406,097
$9,444
$56,664
$396,653
7/1/2011
$396,653
$9,444
$66,108
$387,209
10/1/2011
$387,209
$9,444
$75,552
$377,765
1/1/2012
$377,765
$9,444
$84,996
$368,321
4/1/2012
$368,321
$9,444
$94,440
$358,877
7/1/2012
$358,877
$9,444
$103,884
$349,433
10/1/2012
$349,433
$9,444
$113,328
$339,989
1/1/2013
$339,989
$9,444
$122,772
$330,545
4/1/2013
$330,545
$9,444
$132,216
$321,101
7/1/2013
$321,101
$9,444
$141,660
$311,657
10/1/2013
$311,657
$9,444
$151,104
$302,213
1/1/2014
$302,213
$9,444
$160,548
$292,769
4/1/2014
$292,769
$9,444
$169,992
$283,325
7/1/2014
$283,325
$9,444
$179,436
$273,881
10/1/2014
$273,881
$9,444
$188,880
$264,437
1/1/2015
$264,437
$9,444
$198,324
$254,993
4/1/2015
$254,993
$9,444
$207,768
$245,549
7/1/2015
$245,549
$9,444
$217,212
$236,105
10/1/2015
$236,105
$9,444
$226,656
$226,661
1/1/2016
$226,661
$9,444
$236,100
$217,217
4/1/2016
$217,217
$9,444
$245,544
$207,773
7/1/2016
$207,773
$9,444
$254,988
$198,329
10/1/2016
$198,329
$9,444
$264,432
$188,885
1/1/2017
$188,885
$9,444
$273,876
$179,441
4/1/2017
$179,441
$9,444
$283,320
$169,997
7/1/2017
$169,997
$9,444
$292,764
$160,653
10/1/2017
$160,553
$9,444
$302,208
$151,109
1/1/2018
$151,109
$9;444
$311,652
$141,665
4/1/2018
$141,665
$9,444
$321,096
$132,221
7/1/2018
$132,221
$9,444
$330,540
$122,777
10/1/2018
$122,777
$9,444
$339,984
$113,333
1/1/2019
$113,333
$9,444
$349,428
$103,889
4/1/2019
$103,889
$9,444
$358,872
$94,445
7/1/2019
$94,445
$9,444
$368,316
$85,001
10/1/2019
$85,001
$9,444
$377,760
$75;557
1/1/2020
$75,557
$9;444
$387,204
$66,113
4/1/2020
$66,113
$9,444
$396,648
$56,669
7/1/2020
$56,669
$9,444
$406,092
$47,225
10/1/2020
$47,225
$9;444
$415,536
$37,781
1/1/2021
$37,781
$9,444
$424,980
$28,337
4/1/2021
$28,337
$9,444
$434,424
$18,893
7/1/2021
$18,893
$9,444
$443,868
$9,449
10/1/2021
$9,449
$9,449
$453,317
$0
MLAM
BEACH
Resolutions - C7 T
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Jimmy L. Morales, City Manager
DATE: June 6, 2018
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING, IN SUBSTANTIAL FORM, A LETTER
AGREEMENT BETWEEN THE CITY, AS OWNER OF 500 PARKING SPACES, AND
FIFTH & ALTON (EDENS), LLC ( EDENS), AS OWNER OF 587 PARKING SPACES,
ALL LOCATED IN THE PARKING GARAGE OF THE 5TH & ALTON
CONDOMINIUM, RELATING TO THE ACCELERATED REPLACEMENT OF THE
ORIGINAL GARAGE EQUIPMENT WITH NEW /UPGRADED EQUIPMENT, HAVING
A COST OF APPROXIMATELY $400,000, AND PROVIDING FOR EACH PARTIES'
RESPECTIVE PAYMENT OBLIGATION; AND FURTHER AUTHORIZING THE CITY
MANAGER TO EXECUTE THE LETTER AGREEMENT.
RECOMMENDATION
Adopt the Resolution.
ANALYSIS
On May 18, 2005 the City entered into a development agreement with AR &J SOBE, LLC
( "Developer ") for the 5th & Alton project ( "Project "), consisting of 180,000 square feet of retail space
and a 1,087 space parking garage ( "Garage ").
The City and Developer agreed that the Developer would execute and record a Declaration of
Condominium ( "Declaration ") for the property setting forth the City's and Developer's respective
rights and responsibilities with regard to the development, design, construction, ownership and
operation of the Project.
The City is the owner of the Condominium property, defined in the Declaration as the "City
Controlled Units ", which includes a majority of the parking spaces located in the Garage.
Section 10.2 of the Declaration outlines the repayment and interest accrual obligations of the City
and Developer (collectively "Upfront Systems Contribution ") in connection with the initial purchase
and installation of all systems, equipment and signage, which, with respect to the Garage, included,
access control devices, security cameras, monitors /recorders, money collection equipment, entry and
exit signage (collectively "Original Equipment ").
The Garage opened in October of 2009 and, currently, the Original Equipment needs to be
replaced. As described in the Letter Agreement, attached hereto as Exhibit A- Letter Agreement, the
cost of the new /upgraded equipment is $395,921.68. Pursuant to Section 10.2 of the Declaration,
the replacement cost of the garage equipment shall be allocated as an "Operating Expense" of the
Page 634 of 1103
Garage. Operating Expenses shall be split 46% paid by the City and 54% paid by the Developer as
outlined below:
Developer $213,797.71 (54 %)
City $182,123.97 (46 %)
Total Cost $395,921.68 (100%)
The City's must replace the garage equipment at this time. "Federal" APD is the manufacturer of the
gated equipment currently at the 5th & Alton Garage. In 2015, "Federal" placed the City on formal
notice it would no longer be in the business of gated parking revenue control systems. Since these
systems are proprietary, hardware maintenance and software support/upgrades would have been
with refurbished or used parts and software patches, respectively. Additionally, keeping two gated
parking revenue control platforms is not recommended due to inefficiencies and a lack of centralized
data processing and revenue collections. This was not acceptable and resulted in an accelerated
procurement for replacement gated parking revenue control system for all city garages. As we know,
Skidata was awarded this procurement and to date, nine of ten city garages have transitioned to the
Skidata platform.
As contained in the Letter Agreement, since the Original Equipment will be replaced earlier than the
average twelve and a half (12.5) year useful life of typical garage equipment , the City has agreed to
credit Developer the straight line depreciation amount of the Developer's share of the purchase price
of the Original Equipment. The depreciated amount is $122,777 resulting in a total contribution by
the Developer of $91,020.71 towards the new equipment. This amount will be paid in six and a half
(6 %) annual payments, commencing at the end of the Original Equipment repayment schedule, on
January 1, 2025.
CONCLUSION
The Administration recommends that the Mayor and City Commission adopt the Resolution
approving the Letter Agreement and further authorizing the Mayor and City Clerk to execute said
Letter Agreement.
KEY INTENDED OUTCOMES SUPPORTED
Strengthen Internal Controls To Achieve More Accountability
Legislative Tracking
Tourism, Culture and Economic Development
ATTACHMENTS:
Description
CI Resolution
o Exhibit A - Letter Agreement
Page 635 of 1103