Resolution 2021-31546 RESOLUTION NO. 2021-31546
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE
CITY'S FINANCE AND ECONOMIC RESILIENCY COMMITTEE, AND
APPROVING AN AMENDMENT TO THE MANAGEMENT AGREEMENT
BETWEEN THE CITY OF MIAMI BEACH AND LIVE NATION WORLDWIDE,
INC., FOR THE OPERATION AND MANAGEMENT OF THE FILLMORE MIAMI
BEACH AT THE JACKIE GLEASON THEATER, TO ACCOUNT FOR THE
SIGNIFICANT ADVERSE OPERATIONAL IMPACTS ASSOCIATED WITH
THE CLOSURE OF THE FACILITY SINCE MARCH, 2020 DUE TO THE
COVID-19 PANDEMIC; WITH SAID AMENDMENT INCLUDING: (1) THE
SUSPENSION OF LIVE NATION'S PAYMENT OBLIGATIONS UNTIL 120
DAYS AFTER THE FACILITY IS PERMITTED TO HOST EVENTS AT FULL
CAPACITY; (2) A CREDIT IN THE AMOUNT OF $900,000, REPRESENTING
THE AMOUNTS PRE-PAID BY LIVE NATION THAT ARE APPLICABLE TO
THE PERIOD THE FACILITY WAS CLOSED DURING THE 2019-20 FISCAL
YEAR; AND (3) THE TERMS RELATING TO THE COMPLETION OF
REQUIRED ESCALATOR REPAIRS AT THE FACILITY, IN THE AMOUNT OF
APPROXIMATELY $162,219.46; AND FURTHER, ACCEPTING THE
RECOMMENDATION OF THE CITY MANAGER TO EXTEND THE CURRENT
RENEWAL TERM OF THE AGREEMENT, WITH THE EXTENSION OF THE
TERM TO CORRESPOND WITH THE PERIOD DURING WHICH THE
FACILITY HAS BEEN CLOSED AND UNABLE TO HOST EVENTS DUE TO
THE COVID-19 PANDEMIC; AND AUTHORIZING THE CITY MANAGER AND
CITY ATTORNEY TO TAKE THE NECESSARY AND APPROPRIATE STEPS
TO FINALIZE THE AMENDMENT; AND FURTHER AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE THE AMENDMENT UPON FORM
APPROVAL BY THE CITY ATTORNEY.
WHEREAS, on June 22, 2007, the City entered into a management agreement ("Agreement")
with Live Nation Worldwide, Inc. ("Live Nation") to manage the Jackie Gleason Theater of the
Performing Arts (now named and known as the Fillmore Miami Beach at the Jackie Gleason Theater)
(the "Fillmore" or"Venue"); and
WHEREAS, the Agreement provides for an initial term of ten (10)years, commencing on June
22, 2007, and ending on August 31, 2017 (the "Initial Term"); and
WHEREAS, the Agreement also provides for two 5-year renewal options: the initial 5-year
renewal option is at the discretion of Live Nation ("First Renewal Term"); and the second 5-year
renewal option may be exercised upon mutual agreement of the parties ("Second Renewal Term");
and
WHEREAS, at the end of the Initial Term, in November 2016, Live Nation exercised the First
Renewal Term pursuant to Section 3.2 (i) of the Agreement, commencing on September 1, 2017 and
expiring on August 31, 2022; and
WHEREAS, on December 9, 2009, the Mayor and City Commission adopted Resolution No.
2009- 27278, approving Amendment No. 1 to the Agreement, to authorize Live Nation to extend its
hours of operation and sell alcohol at the Venue for a trial period, subject to specified conditions; and
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WHEREAS, on April 13, 2011, the Mayor and City Commission adopted Resolution No. 2011-
27640, approving Amendment No. 2 to the Agreement, to permanently approve the extension of hours
of operation and liquor sales at the Venue; and
WHEREAS, on April 13, 2016, the Mayor and City Commission adopted Resolution No. 2016-
29368, approving Amendment No. 3 to the Agreement, which established the terms on which the City
may remove the "Rehearsal Hall" from the Management Agreement, should the City continue to
pursue development of the Miami Beach Convention Center Hotel Project; and
WHEREAS,Amendment No. 3 also established financial and operational adjustments related
to Live Nation's operation of the Venue, including establishing the Required City Distribution to be paid
by Live Nation during the First Renewal Term; and
WHEREAS, on January 2020, Live Nation paid the Required City Distribution of $1,106,901;
and
WHEREAS, in March 2020, the COVID-19 pandemic forced Live Nation to close the doors of
the Fillmore and Live Nation has not been able to operate the Facility as contemplated in the
Agreement, and has lost 5/6 of the benefit of its $1,106,901 up front payment to the City for 2020,
while continuing to carry maintenance costs required by the Agreement, with such fixed costs
estimated at approximately $100,000 per month; and
WHEREAS, on December 18, 2020, the Finance and Economic Resiliency Committee
("FERC") discussed an amendment to the Agreement to account for the considerable operational
impacts associated with closure of the facility, and FERC recommended in favor of approving an
amendment to the Agreement based upon the following essential terms:
1. the suspension of Live Nation's payment obligations to the City, including the Required
City Distribution, until 120 days after the facility is permitted to host events at full
capacity;
2. a credit in favor of Live Nation in the amount of$900,000, representing the portion of
the Required City Distribution pre-paid by Live Nation that is applicable to the period
the facility was closed during the 2019-2020 fiscal year;
3. the terms relating to the completion of the required escalator repairs at the facility, in
the amount of approximately $162,219.46, which funds have already been
appropriated; and
WHEREAS, in addition to the above terms recommended by FERC on December 18, 2020,
Live Nation has request an extension of the First Renewal Term (the current renewal term) to
correspond with the period during which the facility has been closed and unable to host events, to
permit Live Nation additional time to recoup the fixed facility costs of approximately $100,000 per
month that Live Nation has incurred, and will continue to incur, until such time as the live performance
industry recovers and stabilizes; and
WHEREAS, the City Manager recommends accepting the recommendation of FERC and
approving the extension of the First Renewal Term requested by Live Nation.
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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, accept the
recommendation of the City's Finance and Economic Resiliency Committee and of the City Manage,
to approve an amendment to the Management Agreement between the City of Miami Beach and Live
Nation Worldwide, Inc., for the management and operation of the Fillmore Miami Beach at the Jackie
Gleason Theater, to account for significant adverse operational impacts associated with the closure of
the facility since March, 2020 due to the COVID-19 pandemic; with said Amendment including: (1)
suspension of Live Nation's payment obligations until 120 days after the facility is permitted to hos
events at full capacity; (2) a credit in the amount of $900,000, representing the amounts pre-paid by
Live Nation that are applicable to the period the facility was closed during the 2019-20 fiscal year; and
(3) the terms relating to the completion of required escalator repairs that the facility in the amount of
approximately $162,219.46; and further, accept the recommendation of the City Manager to extend
the current renewal term of the Agreement, with the extension of the term to correspond with the period
during which the facility has been closed and unable to host events due to the COVID-19 pandemic;
and authorizing the City Manager and City Attorney to take the necessary and appropriate steps to
finalize the amendment; and further authorizing the Mayor and City Clerk to execute the Amendment
upon form approval by the City Attorney.
PASSED and ADOPTED this /—day of "-°"67 2021.
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ATTEST: Dan Gelber, Mayor
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DocuSign Envelope ID:04A3D425-EOBB-4009-B455-EEA131DCC50E Agenda item: C7 0
Date: 1/13/2021
MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive,Miami Beach,Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Raul J. Aguila, Interim City Manage ,JLC (-
DATE: January 13, 2021
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE
CITY'S FINANCE AND ECONOMIC RESILIENCY COMMITTEE, AND
APPROVING AN AMENDMENT TO THE MANAGEMENT AGREEMENT
BETWEEN THE CITY OF MIAMI BEACH AND LIVE NATION WORLDWIDE,
INC., FOR THE OPERATION AND MANAGEMENT OF THE FILLMORE MIAMI
BEACH AT THE JACKIE GLEASON THEATER, TO ACCOUNT FOR THE
SIGNIFICANT ADVERSE OPERATIONAL IMPACTS'ASSOCIATED WITH THE
CLOSURE OF THE FACILITY SINCE MARCH, 2020 DUE TO THE COVID-19
PANDEMIC;WITH SAID AMENDMENT INCLUDING: (1)THE SUSPENSION OF
LIVE NATION'S PAYMENT OBLIGATIONS UNTIL 120 DAYS AFTER THE
FACILITY IS PERMITTED TO HOST EVENTS AT FULL CAPACITY; (2) A
CREDIT IN THE AMOUNT OF $900,000, REPRESENTING THE AMOUNTS
PRE-PAID BY LIVE NATION THAT ARE APPLICABLE TO THE PERIOD THE
FACILITY WAS CLOSED DURING THE 2019-20 FISCAL YEAR; AND (3) THE
TERMS RELATING TO THE COMPLETION OF REQUIRED ESCALATOR
REPAIRS AT THE FACILITY, IN THE AMOUNT OF APPROXIMATELY
$162,219.46; AND FURTHER,ACCEPTING THE RECOMMENDATION OF THE
CITY MANAGER TO EXTEND THE CURRENT RENEWAL TERM OF THE
AGREEMENT, WITH THE EXTENSION OF THE TERM TO CORRESPOND
WITH THE PERIOD DURING WHICH THE FACILITY HAS BEEN CLOSED AND
UNABLE TO HOST EVENTS DUE TO THE COVID-19 PANDEMIC; AND
AUTHORIZING THE CITY MANAGER AND CITY ATTORNEY TO TAKE THE
NECESSARY AND APPROPRIATE STEPS TO FINALIZE THE AMENDMENT;
AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE
THE AMENDMENT UPON FORM APPROVAL BY THE CITY ATTORNEY.
RECOMMENDATION
The Administration recommends that the Mayor and City Commission adopt the Resolution
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BACKGROUND
On June 22, 2007, the City entered into an management agreement (the "Agreement") with Live
Nation Worldwide, Inc. ("Live Nation") to manage the Jackie Gleason Theater of the Performing
Arts, now named and known as the Fillmore Miami Beach at the Jackie Gleason Theater (the
"Fillmore" or"Venue"). The Agreement provides for an initial term of ten (10) years, commencing
on June 22, 2007, and ending on August 31, 2017. The Agreement also provides for two 5-year
renewal options:the initial 5-year renewal option is at the discretion of Live Nation ("First Renewal
Term");the second 5-year renewal option may be exercised upon mutual agreement of the parties
("Second Renewal Term"). In November 2016, pursuant to Section 3.2 (i) of the Agreement, Live
Nation exercised the First Renewal Term, commencing on September 1, 2017 and expiring on
August 31, 2022.
On December 9, 2009, the Mayor and City Commission adopted Resolution No. 2009-27278,
approving Amendment No. 1 to the Agreement, which permitted Live Nation to extend hours of
operation and offer liquor sales at the Venue for a trial period, subject to conditions.
On April 13, 2011, the Mayor and City Commission adopted Resolution No. 2011-27640,
approving Amendment No. 2 to the Agreement, which incorporated the extended hours of
operation and liquor sales for the duration of the Agreement.
Subsequently, on April 13, 2016, the Mayor and City Commission adopted Resolution No. 2016-
29368, approving Amendment No. 3 to the Agreement, which established the terms on which the
City may remove the"Rehearsal Hall"from the Management Agreement, should the City continue
to pursue development of the Miami Beach Convention Center Hotel Project. Amendment No. 3
also established financial and operational adjustments related to Live Nation's operation of the
Venue, including establishing the Required City Distribution to be paid by Live Nation, as follows:
for the first fiscal year of the First Renewal Term, the Required City Distribution amount shall be
the greater of(a) $1,222,512.00 or (b) $1,000,000 increased by the percentage increase for the
established CPI. Beginning in January 1, 2019, and on each January thereafter during the First
Renewal Term, the Required City Distribution is due from Live Nation, which Required City
Distribution shall be increased by a fixed amount equal to two percent(2%)of the amount in effect
for the preceding fiscal year.
In January 2020, in accordance with the Agreement, Live Nation paid the Required City
Distribution of$1,106,901. Shortly thereafter, in March 2020,the COVID-19 pandemic forced Live
Nation to close the doors of the Fillmore. Since its closure, Live Nation has not been able to
operate the Facility as contemplated in the Agreement, and has lost 5/6 of the benefit of its $1.1
million up front payment to the City for 2020, which it had pre-paid to the City shortly before the
pandemic.Additionally, Live Nation is carrying maintenance costs of approximately$100,000 per
month for the Venue,which are fixed costs that cannot be adjusted, even though the entire Venue
has been, and remains, closed.
ANALYSIS
The closure of the Fillmore due to the COVID-19 pandemic has adversely impacted Live Nation,
not only locally with respect to its inability to operate the Fillmore, but nationally, as live
entertainment and event production businesses are among the hardest hit by the pandemic.
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Unlike many retail, restaurant, and other establishments, which have been permitted to reopen
under Miami-Dade County's New Normal Guidelines, live entertainment venues hosting large
gatherings have not had the ability to adjust, due to the risk such events pose of transmission.
On December 18, 2020, the Finance and Economic Resiliency Committee (FERC) discussed a
proposed Amendment to the City's existing Management Agreement with Live Nation to account
for the considerable operational impacts associated with theclosure of the facility since March
2020. FERC recommended in favor of approving an Amendment to the Agreement, based upon
the following essential terms:
1) The suspension of Live Nation's payment obligation until 120 days after the facility is
permitted to host events at full capacity;
2) A credit in the amount of$900,000, representing the amounts pre-paid by Live Nation that
are applicable to the period the facility was closed during the 2019-2020 fiscal year;
3) The terms relating to the completion of the required escalator repairs at the facility, in the
amount of approximately $162,219.46.
In addition to the above terms, the Committee deliberated on the current renewal term and
deadline to exercise the Second Renewal of the Agreement. The City Manager recommended
approving Live Nation's request for an extension of the current renewal term; wherein the
extension of the term corresponds with the period during which the facility has been closed and
unable to host events.
CONCLUSION
In consideration of the foregoing, the Administration recommends, that the Mayor and City
Commission accept the recommendation of the City's Finance and Economic Resiliency
Committee, and approve an Amendment to the Management Agreement with Live Nation
Worldwide, Inc., the City's operator of the Fillmore Miami Beach at the Jackie Gleason Theater,
to account for the significant adverse operational impacts associated with the closure of the
Facility since March, 2020 due to the COVID-19 pandemic; with said Amendment to include: (1)
the suspension of Live Nation's payment obligation until 120 days after the facility is permitted to
host events at full capacity; (2) a credit in the amount of$900,000, representing the amount pre-
paid by Live Nation that are applicable to the period the facility was closed during the 2019-20
fiscal year; and (3)the terms relating to the completion of required escalator repairs at the facility,
in the amount of approximately $162,219.46; and further accept the recommendation of the City
Manager to approve Live Nation's request for an extension of the term for the current renewal
term of the Agreement;with the extension of the term to correspond with the period during which
the facility has been closed and unable to host events due to the COVID-19 pandemic; and
authorize the City Manager and City Attorney to take the necessary and appropriate steps to
finalize the Amendment; and further authorize the Mayor and City Clerk to execute the
Amendment upon form approval by the City Attorney.
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