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Resolution 2021-31749 RESOLUTION NO. 2021-31749 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS APRIL 30, 2021 MEETING, RELATING TO A PROPOSED LEASE BETWEEN THE CITY OF MIAMI BEACH AND MIAMI NEW DRAMA INC., FOR THE DEVELOPMENT AND OPERATION OF A COLLINS PARK CULTURAL ARTS FACILITY WITHIN THE CITY OWNED COLLINS PARK GARAGE (THE "LEASE"), AND APPROVING THE TERM SHEET FOR THE LEASE ATTACHED AS AN EXHIBIT TO THE COMMISSION MEMORANDUM ACCOMPANYING THIS RESOLUTION; FURTHER, DIRECTING THE ADMINISTRATION TO DRAFT AND FINALIZE THE LEASE WITH MIAMI NEW DRAMA, INC., CONSISTENT WITH THE TERM SHEET, WITH THE LEASE SUBJECT TO APPROVAL BY A 4/7THS VOTE OF THE PLANNING BOARD AND A 6/7THS VOTE OF THE CITY COMMISSION, PURSUANT TO SECTION 1.03(B)(4) OF THE CITY CHARTER; AND FURTHER, REFERRING THE PROPOSED LEASE TO THE PLANNING BOARD FOR REVIEW, IN ACCORDANCE WITH THE REQUIREMENTS OF THE CITY CHARTER AND CITY CODE. WHEREAS, on November 9, 2016, the City Commission established the Collins Park Arts District Overlay via Ordinance No. 2016-4061, in response to an expressed desire by the Collins Park Neighborhood Association to incentivize arts and entertainment-related uses; and WHEREAS, the ground floor of the recently completed Collins Park Garage, located at 340 23rd St., includes approximately 16,000 gross sq. ft. of unfinished interior commercial space with an elevated exterior terrace providing access from the street; and WHEREAS, on May 22, 2020, the Finance and Economic Resiliency Committee discussed tenant programming for the unleased commercial space of the Collins Park Garage, emphasizing the importance of community engagement and neighborhood enhancement, and the possibility of using City funds to curate cultural activation; and WHEREAS, on December 18, 2020, Miami New Drama, Inc. ("Miami New Drama" or "MIND") presented the Finance and Economic Resiliency Committee with an unsolicited proposal to program the tenant space of the Collins Park Garage as a flexible black box studio, however, the Committee recommended preparation of a Request for Proposals to solicit interest from cultural arts institutions with independent financial support; and WHEREAS, on January 27, 2021, pursuant to City Commission Resolution No. 2021-31568, the City Commission found that the City's best interests were served by waiving formal competitive bidding requirements in favor of MIND's unsolicited proposal and authorized the negotiation of a term sheet with MIND to include the following material terms: • Miami New Drama must remain functionally located within the City of Miami Beach, with Miami Beach as its primary performance venue; • Existing principal directors Michel Hausman, Moises Kaufman, and Nicholas Richberg must remain directly involved with Miami New Drama; • Miami New Drama's board of directors must include voting representation by the City of Miami Beach; and • Miami New Drama's sublease of any restaurant or retail component must be negotiated at market rates; and WHEREAS, the Administration has negotiated a term sheet pursuant to the direction provided by City Commission Resolution No. 2021-31568 (the "Term Sheet"), which is attached as an Exhibit to the Memorandum accompanying this Resolution; and WHEREAS, pursuant to the Term Sheet, MIND will enter into a lease for the ground floor space for an initial term of five (5) years, with options for three (3) additional five (5) year terms, in order to activate the Facility as a theater for its not-for-profit cultural presentations, production of live theatrical performances and uses ancillary thereto, including its administrative and business functions and rehearsal, costume, and set design facilities for performances, as well as a restaurant café pursuant to a sublease to a third-party operator; and WHEREAS, as proposed, MIND is responsible for funding all design and architectural and engineering professionals associated with the buildout improvements ("Project"), at an amount anticipated to be approximately $250,000 (the "Tenant Contribution"), and MIND must demonstrate it has secured funding in an amount equal to the Tenant Contribution within 365 days from City Commission approval of the lease agreement; and WHEREAS, pursuant to the Term Sheet, the City is responsible for the construction of the Project and the funding for the construction hard costs related to the buildout, in an amount not to exceed $4.75 million (the "Landlord Contribution"), and at the present time, the City has not yet identified any funding sources for the Landlord Contribution; and WHEREAS, the parties agree that, subject to the appropriate budget appropriation by the City, the Project will be developed with a design-to-budget approach based upon a budget equal to the sum of the Landlord Contribution and Tenant's Contribution; and WHEREAS, the City shall utilize a Construction Manager at Risk with Guaranteed Maximum Price ("GMP") delivery method for the construction of the Project, and the City and the City's construction manager shall have the right to review and reasonably approve and provide comment as the plans and specifications are prepared at the 30%, 60%, 90% and final completion stages by the architect; and WHEREAS, the City must identify and appropriate City funds in an amount equal to the Landlord Contribution no later than October 1, 2024, or either party may terminate the Lease; and WHEREAS, on April 30, 2021, the Finance and Economic Resiliency Committee provided guidance on the Project and recommended that the Administration negotiate a lease agreement consistent with the Term Sheet for the City Commission's consideration; and WHEREAS, pursuant to Section 1.03(b)(4) of the City Charter governing leases of ten years or longer of City-owned property, the Lease requires approval by a majority 4/7 vote of all members of the Planning Board and 617 vote of the City Commission; and WHEREAS, pursuant to the favorable recommendation of the Finance and Economic Resiliency Committee, the Administration requests this item be referred to the Planning Board for review of the Lease and direction to draft and finalize the lease agreement with Miami New Drama, Inc., consistent with the Term Sheet and contingent upon the identification and appropriation of sufficient Project funding, with the final agreement subject to prior approval of the City Commission. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, hereby accepts the recommendation of the Finance and Economic Resiliency Committee at its April 30, 2021 meeting, relating to the proposed lease between the City of Miami Beach and Miami New Drama Inc., for the development and operation of a Collins Park cultural arts facility within the City owned Collins Park Garage (the "Lease"), and approves the term sheet for the Lease attached as an exhibit to the Commission Memorandum accompanying this Resolution; further, directing the Administration to draft and finalize the Lease with Miami New Drama, Inc., consistent with the term sheet, with the Lease subject to approval by a 4/7ths vote of the Planning Board and a 6/7ths vote of the City Commission, pursuant to Section 10.3(b)(4) of the City Charter; and further, referring the proposed Lease to the Planning Board for review, in accordance with the requirements of the City Charter and City Code. PASSED and ADOPTED THIS .13 day of June, 2021. ATTEST: „______d CP ?_.As.itc-L( RAFAE. GRANADO, ITY CLERK DAN GELBER, MAYOR `s:: K • �'''' APPROVED AS TO ;, `z,,,ma FORM& LANGUAGE ai;CORPf ORMED` a FOR EXECUTION . . 4' ....;',:01 ,,„;,;! l� 1 6 11 — Z/ CRy Alsamey # Dile Resolutions-R7 F MIAMI BEACH COMMISSION MEMORANDUM TO: Honorable Mayor and Members of the City Commission FROM: Aline T. Hudak, City Manager DATE: June 23, 2021 3:30 p.m. SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS APRIL 30, 2021 MEETING, RELATING TO A PROPOSED LEASE BETWEEN THE CITY OF MIAMI BEACH AND MIAMI NEW DRAMA INC., FOR THE DEVELOPMENT AND OPERATION OF A COLLINS PARK CULTURAL ARTS FACILITY WITHIN THE CITY OWNED COLLINS PARK GARAGE (THE "LEASE"), AND APPROVING THE TERM SHEET FOR THE LEASE ATTACHED AS AN EXHIBIT TO THE COMMISSION MEMORANDUM ACCOMPANYING THIS RESOLUTION; FURTHER, DIRECTING THE ADMINISTRATION TO DRAFT AND FINALIZE THE LEASE WITH MIAMI NEW DRAMA, INC., CONSISTENT WITH THE TERM SHEET, WITH THE LEASE SUBJECT TO APPROVAL BY A 4/7TH VOTE OF THE PLANNING BOARD AND A 6/7TH VOTE OF THE CITY COMMISSION, PURSUANT TO SECTION 1.03(8)(4) OF THE CITY CHARTER; AND FURTHER, REFERRING THE PROPOSED LEASE TO THE PLANNING BOARD FOR REVIEW, IN ACCORDANCE WITH THE REQUIREMENTS OF THE CITY CHARTER AND CITY CODE. RECOMMENDATION Accept the recommendation of the Finance and Economic Resiliency Committee and authorize the Administration to negotiate a lease agreement consistent with the term sheet, subject to any direction on policy and business terms and for final review by the City Commission, and refer the draft lease agreement to the Planning Board for review. BACKGROUND/HISTORY On November 9, 2016, the City Commission established the Collins Park Arts District Overlay via Ordinance No. 2016-4061, in response to an expressed desire by the Collins Park Neighborhood Association to incentivize arts and entertainment-related uses. Today, the Collins Park neighborhood is home to cultural institutions including the Bass Museum of Art, the Miami City Ballet,and the Regional Library. In addition, the Collins Park neighborhood will become home to Starwood Capital's headquarters currently under construction at 2340 Collins Avenue. Page 1027 of 1884 The recently completed Collins Park Garage, located at 340 23rd Street, spans an entire block of 23rd Street between Park Avenue and the vacated Liberty Avenue. The Collins Park Garage is located immediately adjacent to the Miami City Ballet headquarters and the future site of the City's public-private artist and educator workforce housing project. The parking structure's ground floor includes approximately 16,000 gross sq.ft. of unfinished interior commercial space with an elevated exterior terrace providing access from the street. On May 22, 2020, the Finance and Economic Resiliency Committee (the "FERC" or "Committee") discussed tenant programming for the unleased commercial space of the Collins Park Garage, emphasizing the importance of community engagement and neighborhood enhancement, and the possibility of using City funds to curate cultural activation. On July 29, 2020, Miami New Drama, Inc. ("Miami New Drama" or"MIND") presented the City Commission with an unsolicited proposal to program the tenant space of the Collins Park Garage as a flexible black box studio. The City Commission directed FERC to examine the financial feasibility of the activation once MI ND prepared a cost estimate and further developed its proposal. On December 18, 2020, MIND presented FERC with an unsolicited proposal featuring a Concept Plan, which is attached as Exhibit A. In light of the fact that MIND had not yet identified any outside funding sources, the Committee recommended preparation of an RFP to solicit interest from cultural arts institutions who may offer independent financial support without relying solely on the City to subsidize construction. On January 27, 2021, upon review of the Administration's draft RFP for the Collins Park Cultural Arts Facility and MI ND's unsolicited proposal, the City Commission found that the City's best interests were served by waiving formal competitive bidding in favor of MI ND's unsolicited proposal. The City Commission adopted Resolution No. 2021-31568, authorizing negotiation of a term sheet with MIND to include the following material terms: • Miami New Drama must remain functionally located within the City of Miami Beach, with Miami Beach as its primary performance venue; • Existing principal directors Michel Hausman, Moises Kaufman, and Nicholas Richberg must remain directly involved with Miami New Drama; • Miami New Drama's board of directors must include voting representation by the City of Miami Beach; and • Miami New Drama's sublease of any restaurant or retail component must be negotiated at market rates. On March 26, 2021, the FERC reviewed a draft of the proposed term sheet and provided direction to the Administration regarding four salient issues, which subsequently were resolved by the parties and incorporated into the Term Sheet (i.e., trigger for the third renewal term; allocation of risk for construction cost overruns; minimum days of Facility operation; and allowing MIND to apply for the City's cultural arts grants in relation to programming at the Facility.) On April 30, 2021, the FERC voted to move the item as presented for review by the City Commission, with requests for continued negotiation on two topics: (i) further development of Miami Beach-specific branding for the Facility and (ii) incorporation of a deadline for the City to identify sufficient Project funding. Page 1028 of 1884 ANALYSIS MI ND's Colony Theatre Management Agreement Since 2016, Miami New Drama has successfully activated the Colony Theatre pursuant to a Management Agreement that provides an annual operating subsidy from the City ("Colony Management Agreement"). Pursuant to the terms of the Colony Management Agreement, which expires in September 2023, MIND has received a cumulative amount of $2 million since the inception of the Colony Management Agreement in 2016. Colony Theatre Annual Annual utility Subsidy reimbursement Management Agreement(2016) $170,000 $80,000 Management Agreement $420,000 $80,000 Amendment No. 2 (2018) In addition, notwithstanding the City's obligations pursuant to the Colony Management Agreement, MIND receives Cultural Arts Council (CAC) grant funding that is not tied to the Colony Management Agreement nor MI ND's operation at the Colony, but is available to MIND because it is a nonprofit operating within Miami Beach. CAC grant funding FY 18/19 $26,400 CAC grant funding FY 19/20 $24,204 CAC grant funding FY 20/21 $22,533 COVID-19 emergency relief grant $69,458 Colony Annual Benchmarks. Performances Attendance Required Provided Required Provided FY 18-19 150 198(132%) 35,000 39,497(113%) FY 19-20 150 146(97%) 35,000 26,407(75%) The Colony Theatre has been closed since March 12, 2020, which prevented the run of two major productions. MIND pivoted to virtual programming, reaching some 7,000 people online, and recently completed an acclaimed production of 7 Deadly Sins on Lincoln Road. Recently, the production was awarded the Drama League Award for Outstanding Interactive or Socially- Distanced Theater at the 2021 Drama League Awards. According to MIND, they are the first theater company in Florida to be nominated for and to win this award. Term Sheet dated June 9. 2021 The Administration has negotiated a term sheet based on MI ND's unsolicited proposal and as further refined by City Commission Resolution No. 2021-31568 ("Term Sheer'). Attached as Exhibit B, the Term Sheet incorporates the final guidance provided by the FERC when the Committee last heard the item on April 30, 2021. Key Lease Terms Tenant Miami New Drama, Inc.,a 501(c)(3)entity Page 1029 of 1884 Address 340 23rd Street,Collins Park Cultural Arts Facility Premises Ground floor of Coffins Park Garage, approximately 16,000 sq.ft. interior space plus exterior terrace areas Commencement Lease Year One commences at Temporary Certificate of Occupancy Date (TCO)for the Buildout Improvements Initial Term Five(5)years Total of fifteen(15)years possible: •Two (2) renewal options of five (5) years each, subject to Tenant Renewal Terms being in good standing • Following completion of initial two (2) renewal terms, one (1) final renewal period of five(5)years,upon mutual agreement of the parties. $1 per year. Tenant's obligations limited to those operating expenses solely applicable to the Facility itself and Tenant shall not pay any Rent additional common area maintenance expenses with respect to any other portion of the building. Tenant solely responsible for operational and programming expenses, including utilities, maintenance, and applicable. taxes (sales taxes, use/excise taxes, personal, and ad valorem applicable to the Premises and Tenant's business) with no City funding obligation whatsoever with respect to such costs. City will have no payment obligations with respect Operating to Operating Expenses. Expenses MIND to make reasonable efforts to apply for the Florida Division of Cultural Affairs Cultural Facilities Grant. Tenant, as a local cultural organization, may apply for Cultural Arts Council grants, and may pursue other grant opportunities offered by the City.. Tenant responsible for day-to-day cleaning, maintenance, and repairs. City responsible for major building systems (HVAC, electric, fire, water, water intrusion, etc.) and the building structure, including walls, windows, Maintenance and exterior. Tenant also responsible for reasonable maintenance and repairs of the exterior frontage of the Premises, i.e. the sidewalk and stairs walk-up, in a manner consistent with similarly situated commercial establishments City responsible for funding of construction services,contractor selection, construction for buildout of the Premises, and procurement and/or installation of all theatrical equipment (collectively, the `Buildout Improvements"or"Project'). Tenant responsible for selection and funding of Project design and Cultural Center Architect, for the City's review and reasonable approval in its proprietary Page 1030 of 1884 Buildout capacity, and subject to Property Managements citywide design guidelines. In no event shall the City be responsible to fund any portion of design services. Buildout Improvements will be developed with a design-to-budget approach based upon a Budget equal to the sum of the Landlord Contribution and Tenant's Contribution. City's total anticipated funding and construction budget shall not exceed $4,750,000.00.While there is desire to support this Cultural Anchor, the City has not identified or budgeted a funding source for the buildout of the Facility. The parties have mutually agreed to language contained in the Term Sheet that limits the City's exposure by stipulating that construction costs may not exceed $4.75 million. Provision of a 10% contingency of overall project costs has been included in the Term Sheet to ensure that in no City Financial event shall the use of the contingency cause for the Gross Maximum Price Contribution of$4.75M to be exceeded, and in any such event, the City's Contractor shall be solely responsible for all costs that exceed this price,without any reimbursement from the City. Update: In accordance with direction provided by the FERC, the Administration recommends that a deadline be established for October 1, 2024 in order for the City to identify all funding for the total budgetary costs associated with the Project buildout. In the event that funding is not identified,the City would not be responsible for any of its obligations under the Lease,unless future City Commission action provided otherwise. Tenant shall be responsible for retaining and funding all design professionals, including the Architect, in the amount anticipated by Tenant to be$250,000.00,which Tenant shall raise through grants and donations (the "Tenant's Contribution"). Tenant's Contribution shall cover payment of all design services and soft costs (architectural and/or engineering fees) Tenant Financial and, funds permitting, the acquisition of equipment for the theatrical Contribution performance space. City may terminate the Agreement in the event Tenant fails to demonstrate it has secured funding for the design services and fails to contract with an Architect within 365 days following City Commission approval of the Lease. Tenant shall use the Facility solely and exclusively as a theater for its not- for-profit cultural presentations, production of live theatrical performances and uses ancillary thereto, including its administrative and business Uses functions and rehearsal, costume and set design facilities for performances, and may activate the agreement as further provided herein with activations that are complementary and ancillary to the cultural component of the facility. Page 1031 of 1884 •Café sublease shall be market rate and selection of Café operator subject to City Manager approval. • Tenant may offer one (1) concession or for-profit third-party activation (i.e. Books and Books) at below market lease rates in a footprint not to exceed 250 sq.ft.,subject to City Manager approval. •All other concessions(or similar for-profit activations by third parties) Cafe and offered at below market rates shall be subject to City Manager's Concession reasonable approval, limited to a term of 30 days (but up to 90 days Subleases upon City Manager approval), and ancillary and complementary to Facility's cultural programming. Update: In accordance with direction provided by the FERC, in order to ensure continuous activation of the Facility,the City shall have the right to the assignment of all MIND's concessions, subleases and subtenants at the Facility,in the event of a default or termination of MIND. During initial two (2)years of the Term, Facility shall operate at least four (4) days per week and the Café at least six (6) days per week, during Minimum hours consistent with similar café operations within the vicinity. Following Operation the initial two-year ramp up, minimum operation shall consist of six (6) days for the Facility and six(6)days for the café,and the Facility shall not be dark on the same day that the café is closed. As required in the Resolution waiving bidding, principal directors, Michel Hausmann and Nicholas Richberg must remain actively involved in the company throughout Lease Term. If any one of the key individuals leaves the company or is no longer actively involved, MIND must locate a Key Individual comparable replacement within 180 days,with the reasonable approval of Clause the City Manager,otherwise City may terminate.The parties have agreed to remove Moises Kaufman as a "Key Individual" as he is not actively involved with MIND as would be required for a Key Individual. The Administration believes that this will have little, if any, material impact on MIND's creative leadership or the ultimate success of the Facility. City Manager or designee serves as one (1)voting member on board of Representation on directors,with one(1)additional non-voting member,designated at option Board of Directors of the City Manager.This is an increase above the one(1)non-voting city representative on the board currently. Extension of Term of Management Agreement for the Colony Theatre to be extended Colony Theater coterminous with the Collins Park Lease Term (including renewal Management periods), including cross-default provision for both the Management Agreement Agreement and Lease Agreement City may terminate for convenience if: 1. City Commission, in its sole and absolute discretion, does not appropriate sufficient funds for the Buildout Improvements no later than October 1, 2024. Page 1032 of 1884 2. City does not obtain regulatory approvals required for the Buildout Improvements. 3. Tenant does not secure funding and enter into contract Termination for with an Architect within 365 days following Lease Convenience approval by City Commission. 4. Tenant fails to replace a Key Individual. MIND may terminate for convenience if: 1. City Commission, in its sole and absolute discretion, does not appropriate sufficient funds for the Buildout Improvements no later than October 1, 2024. During the first twelve (12) months following Commencement Date (such period constituting "Lease Year I", with each successive twelve (12) month period thereafter constituting another "Lease Year"), Tenant shall cause the Facility to host at least: 1. 125 cultural or community activations per year 2. 25,000 patrons per year (inclusive of virtual patrons for hybrid events) 3. 150 students per year 4. 75 seniors per year 5. 50 pro bono nonprofit/community rental hours per year 6. 500 discounted tickets provided per year Benchmark Performance Benchmarks shall increase during the Initial Term as follows: Standards 1. Lease Year 2: 150 events, 30,000 patrons, 175 students, 80 seniors, 50 pro bono nonprofit/community rental hours 2. (Lease Year 3: 175 events 35,000 people, 200 students, 85 seniors, 55 pro bono nonprofit/community rental hours 3. Lease Year 4: 200 events 40,000 people, 225 students, 90 seniors, 55 pro bono nonprofit/community rental hours 4. Lease Year 5 (and thereafter including Renewal Terms): 220 events 45,000 people, 250 students, 95 seniors, 60 pro bono nonprofit/community benefit rental hours Prior to any renewal periods, performance benchmarks may be adjusted as mutually agreed to by the parties In addition to the City's Community Benefit Fund program for nonprofit rental waivers which are funded by the City, the City also has the right to use the Facility, excluding the restaurant/cafe, up to four (4) times per Community Lease Year, subject to availability and reasonable notice, for public Benefit Proffer purposes (recreational programs, public meetings, trainings, City- sponsored special events, receptions), without payment of any rental or use fee,except reimbursement by the City of Tenant's direct out-of-pocket expenses reasonably incurred Page 1033 of 1884 Project Delivery Structure Since MI ND's original proposal, the Concept Plan featured an architectural design by Mexico- based TEN Arquitectos, whose founder, Enrique Norten, serves on MI ND's board of directors. According to MIND, TEN Arquitectos has agreed to considerably reduce the cost of services to MIND, which will enable the design of a world-class cultural facility by a prominent architect at an attractive price. Given that the City is responsible for construction costs, the property is City- owned and will be leased rent free, the City would typically prefer to control all aspects of design and construction. However, considering that MIND has agreed to fund all design-related services and soft costs in furtherance of a superior facility (that the City will own and control upon lease expiration), the Administration recommends acceptance of MI ND's proposed arrangement, as long as the City retains control of construction management for the Project and retains the ability to reasonably approve the design of the project. Although MI ND initially requested control of construction, MIND has consented to this compromise since the City is funding the balance of hard costs. The Term Sheet provides that the City will utilize a Construction Manager at Risk with Guaranteed Maximum Price ("GMP")delivery method for the construction of the Project. In addition to MI ND's proffer to allow the City and City's construction manager's reasonable design input, with approvals at the 30%, 60% and 90% design stages, the City will also require the Tenant to include certain provisions in its Architectural/Engineering (NE) contract that would otherwise be included in all NE contracts to which the City is a party, i.e. the City's minimum design standards, third-party beneficiary rights, and ownership/use rights to drawings and specifications. The Term Sheet requires that MIND raise all the funds necessary for architectural services, which MIND has indicated to be approximately $250,000. The parties have agreed that the City shall have the right to terminate the agreement if, after 12 months of Lease approval by the City Commission, MIND is unable to demonstrate that it has secured this funding and entered into contract with the architect. In order to protect the City against project over-runs, the Term Sheet contemplates that the parties enter into a Guaranteed Maximum Price Agreement and the schedule of values attached thereto or contained therein (collectively, the "GMP Agreement") shall: (i)contain a contingency line item equal to ten percent (10%) of the overall project costs, and (ii) not exceed the amount of the Landlord Contribution. In no event shall the use of the contingency cause for the GMP to be exceeded, and the City's Contractor shall be solely responsible for all costs that exceed the GMP,without any reimbursement from the City. City Financial Contribution To address any potential City exposure for unanticipated construction costs, the parties have mutually agreed to the City's guaranteed maximum contribution amount of $4.75 million for the cost of construction, with assurances in the Term Sheet of (i) a contingency line item equal to ten percent (10%) of the overall Project costs, (ii) which shall not exceed the amount of the Landlord Contribution. In no event shall the use of the contingency cause for the Gross Maximum Price (GMP) be exceeded, and the City's Contractor shall be solely responsible for all costs that exceed the GMP,without any reimbursement from the City. To avoid adverse cost overruns for which the City would be liable and to ensure that the City's contribution to the Project does not exceed the amount of the agreed Landlord Contribution (i.e., $4,750,000.00), prior to the commencement of the Buildout Improvements, the City shall cause the City's Contractor to buy-out, at a minimum, (i)each line item of the schedule of values Page 1034 of 1884 which exceeds $200,000.00 (and to the extent not exceeding $200,000.00, each major trade within the schedule of values), and (ii) eighty percent (80%) of the overall project costs (schedule of values), with the cost of such bought-out line items being consistent with the approved project budget (which shall not exceed the amount of the Landlord Contribution). In addition, if at any point during construction, the contingency amount drops below 20% of the initial contingency amount, the Furniture, Fixtures and Equipment (FFE) budget will be adjusted down to free up addition funds, to ensure that sufficient contingency funds remain available. The Administration believes these provisions are sufficient to safeguard the City from incurring unanticipated costs which are grossly in excess of that which has been agreed to in the Term Sheet. This is important considering that MI ND will not cause to be created the architectural plans, which can be used to better estimate construction costs, until such time as a lease is definitively negotiated. The foregoing considerations pertain to cost overrun contingencies which would only be implicated once the City commits the funding for the Landlord Contribution and following the commencement of construction.At the present time, the City has not yet identified any funding sources for the $4.75 million hard costs. It is for this reason that the Term Sheet conditions Project performance upon the City Commission identifying a budgetary source for the entire $4.75 million construction costs. The Administration is supportive of this unique opportunity for a celebrated resident cultural partner to further activate Collins Park, however, budgetary limitations present a crucial obstacle which must be overcome in order to proceed with the Project. In the event the City Commission, in its sole and absolute discretion, does not appropriate sufficient funds for the Buildout Improvements no later than October 1, 2024, either party may terminate the Lease for convenience. April 30. 2021 FERC Meeting Notwithstanding the significant issue related to yet-to-be identified funding for the Project, in providing a favorable recommendation for the Project terms, the FERC highlighted certain outstanding issues for the parties to address. The Administration has incorporated the direction provided by the FERC on April 30, 2021, into the Term Sheet. Therefore, it is not the same document presented in the April 30th FERC agenda, but the Term Sheet differs only in that it now includes the guidance provided by the FERC: • First, the Committee requested further development of Miami Beach-specific branding for the Facility. In response to this request, MIND has proffered to develop site-specific branding for the Facility that includes a new logo that will be utilized in all literature associated with the Facility. A copy of the proposed branding collateral is attached as Exhibit C. • Secondly, the Committee requested incorporation of a deadline by which the City must identify and allocate sufficient Project funding. In response to this request by FERC, the Administration recommends that the City Commission have until October 1, 2024 to identify and appropriate the full amount of the Landlord Contribution. If the total funding is not identified by this date, then MIND and City would not be obligated to perform under the Lease. • Third, the Committee addressed risk mitigation to ensure continuous activation of the commercial restaurant space if Miami New Drama is nonoperational or unsuccessful. As standard practice, City agreements require the assignment of any vendors, sub vendors, sublessors, or subtenants should the lease be terminated. This will enable the City to keep the facility active by assigning restaurant operations to another entity if Miami New Drama is unable to manage the Facility or Café successfully. Page 1035 of 1884 SUPPORTING SURVEY DATA According to the 2019 Community Satisfaction Survey, 85.5% of the polled residents agreed that cultural activities contribute to quality of life in Miami Beach. The lease for the development and operation of a cultural arts facility within the Collins Park Garage will further the cultural activities in the Miami Beach and, as a result, resident quality of life will prosper. FINANCIAL INFORMATION The City's financial responsibility, discussed in the foregoing Analysis above, is $4.75 million. MIND has 12 months to demonstrate it has raised the costs associated with the design of the Project, anticipated to be $250,000.00, whereas the City has approximately three (3) years to identify and appropriate the funding associated with the hard costs of the Project. At the present time. the City has not yet identified any funding sources for the $4.75 million hard costs. CONCLUSION Subject to direction as to the policy and business issues outlined in this Memorandum, the Administration recommends that the City Commission approve the Term Sheet in concept and authorize the Administration to continue its negotiations and develop the lease agreement for the City Commission's consideration. Pursuant to Section 1.03(b)(4) of the City Charter governing leases of ten years or longer for City-owned property, the Lease requires approval by a majority 4R vote of the Planning Board and 6/7 vote of the City Commission. Accordingly, the Administration requests that the City Commission refer the Project and draft agreement to the Planning Board for review, in accordance with the requirements of the City Charter and City Code. Applicable Area South Beach Is this a"Residents Right Does this item utilize G.O. to Know" item. pursuant to Bond Funds? City Code Section 2-14? Yes No Strategic Connection Prosperity - Market and promote Miami Beach as a world class arts, culture, and quality entertainment destination. Legislative Tracking Economic Development ATTACHMENTS: Description • ❑ Attachment A-Concept Plan ❑ Attachment B -Term Sheet ❑ Attachment C - Branding Page 1036 of 1884 ❑ Resolution Page 1037 of 1884 • • • 4'..-,. • - . , . - 600 • 6 •-•.- .,_,--," - _., ,,fjt..:,:,,,,.,.,".‘ .,A',47,...1'141,et-'4'V•A . . k.....:'.'4:;'.. • lit:t A , ... • ... .4,,mr,ert.,,...... ...-4,. .--,4tx•_,.•:.,7-;It..1,,,,,..-ft_: • .. '4,4`..... - • CULTURAL 7,,,-,, --,45:. f.,!. --&..,. •---'..`-',,,A.-..,••3,4'1-4.•,Arr',.-__,.--ka-L4- 1,, ,--:4-------- t=s-t---r----=` ;:-.....:-.-.._..-. --.-.•• ..•. ..---- ..;;;;' . ,,,,,,,, .-.---,-.-,. ..4,i- 7.7; ----.._,-_--, ---,-4.:- ._~_..-=W,,,-%;.,•,, -!---'25-,, .;*.•-,.t:`. - .. ..--i-, _ . - ' k,-4 ..A. 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COLLINS PARK ,1 II •• ••• CENTER : •••••• In four short years Miami New Drama hasf*----U3' 'I.:- --' transformed the Colony Theatre from an underused rental space,that was dark 80%of the year, into a world-class dynamic theater, serving over 40,000 people annually in over 175 active nights,generating over$10 million `r - Y in economic impact on Lincoln Road alone since its residency began. Producing theater of the highest artistic caliber, reflecting our unique , cultural diversity,we help to solidify Miami Beach as a cultural capital of the world. _.. , `f- j Nationally recognized for our daring work,we s' - have become one of the fastest-growing cultural ? 1_,`institutions in the state of Florida. , • ‘, fir: - d .`. "Miami New Drama is the theatre that most exemplifies �•, the city right now" -American Theatre Magazine -. y.. ..`° q , •••••• • ••• COLLINS PARK • • ••• CENTER •••••• Miami New Drama programming attracts audiences that are --",,{. multilingual, multicultural, multigenerational.With an annual economic impact of over$3.5 million on the area and _ '� t generating over$154,755 in local government revenue,our Q _ " presence is significant. (Source.Aroericansfor the Arts) `� --` _- - on ........; _= r Audience surveys reveal: • - .- ., 1111 if ifsit f i ,M,,, ' FS •86% have dinner or drinks around Lincoln Rd • 77% drive to the theater and pay for parking •55% have a household incomes over$100,000 •87% are full time residents, 8%seasonal,5%tourists "Miami New Drama [...] has crafted works that speak to and reflect South Florida's richly diverse 21st century audiences." -Miami Herald • • • 4111 •N •••• COLLINS PARK - • • • ••• CENTER ••••MO• 11111r IMP. 41.0 Miami New Drama believes in the power _ Mb _ of theater to educate, excite, and enlighten - —-- = _� our youth. In the last two years alone, .1 - - MIND has introduced nearly 20,000 n _ 4 II Miami-Dade County public school students -._ �,` - - �••,, to vibrant and relevant storytelling through free live performances at the Colony .-' .`V „.''gr .4.„4. - ice~ ir Theatre and in-school tours. � ��. r0 '�. ii. , Our work bridges cultural divides and �• promotes conversation about important : '" emotional, social, and political topics. _....... -= I4. - Robust programming at the Colony Theater is currently a limiting factor to the ' growth of MiND's educational -71 programming.Additional space would t serve as the educational hub for Miami New Drama allowing for consistent . workshops for adults and youth, camps, t•: and Theatre for Young Audiences -iv-�; „ -iv-._ programming to occur. - fa -EcUR1r Pap.10•1 d .f "mimeo j ... COLLINS PARK • ••• CENTER I.•••• NIGHT-TIME ACTIVATION: *Collins"Park Cafe-indoor and outdoor seating •200 seat robustly programmed theater *The Living Room-Gallery,Bookstore,Coffee,and Cultural Lounge •Collins Park Cafe serving dinner *Weekend Theater for Young Audiences •Live music events in the cafe and Liberty Plaza *Educational Programming and-Workshops •Evening rehearsals *Streetlacing rehearsal studio.;;.; •Gallery events There are currently over 66 retail vacancies on Lincoln Road and over 35,000sf of vacant space in the immediate vicinity of Collins Park. (LR BID,costar) By blending commerce and culture, Miami New Drama will prove to be a transformative economic catalyst to the Collins Park neighborhood.The already developing cultural campus, home to Miami City Ballet,The Bass,and the Regional library would be enhanced by day and night activation that will bring people and cars to the Collins Park Garage and solidify the area as a cultural hub for the community. g i,c - ty ss>r /. - - F ,. N.1042011834 ••••N • ••• COLLINS PARK • • ••• CENTER ••••N Miami New Drama is a tested and proven organization that can infuse this project with dynamic artistic programming while supporting our current programming with much needed educational, rehearsal and administrative space. 23RD STREET With an innovative space usage plan and design - developed by renowned C„, architect Enrique Norten ` e d - d and TEN Arquitectos, w;, ;.:.: .: :.. -, Miami New Drama will .. F p provide ample community ,. Y ri M GYery�Ca0ee19aoltafc� . programming contributing Educxm ,udo w i RenaS •:qr. fi°i:EC • }` to the public realm both ,s,sy-t E day and night. Ilfr ,_ :,e ee a �m 1 ______________ .,, .,, Y a- "Miami New Drama f _ i has become the pulse of the Miami ` Theatre Scene" 'i: .% -Broadway World - r ... $ I i B '- _ i 31 r . w ft.10.3e/1334 i-4. g1.y_ II ti •.1.,,,,,*� ��e . ' i ••• COLLINS PARK ik ' .E , •• CENTER ..�1, - �__ ; ,illIr •••N• 1 ' i . With 33 years since its foundation by Enrique Norten(Mexico City, FORUM-"`'^'"'°° 114,____L.... {i 11' IEI Pow CT.4yen•,Museum•iaa,.USA ' ! New Yak Rabic i bury•New V.A.USA 1954)and more than 60 projects built,TEN Arquitectos has an 1 ' +l extensive portfolio of cultural, residential, hotel and infrastructure I i I I projects.With offices in Mexico City, New York and Miami, projects 1 i �. s — include the Guggenheim Museum in Guadalajara,the New York ( ;,� s I . - , Public Library,the National Theater School in Mexico City and the , Rutgers Business School in New Jersey. j - - = ' Sebav a..•Ba9+r GaFry•New Ya*USA ! PARK®120-Miami Beach,USA i i Me.can Mu,ean-Son F.aicxe USA-' TEN Arquitectos projects reconcile aesthetics with the common 1,,., :; I I I good:sustainable projects that are socially,environmentally, I ' l • - politicallyand economicallyresponsible. 11".' la' II ` 't ` - Foy R...Aa:a•N.w Yoh.USA - {( '�eI`••-•.1.1 ?- �� This approach has brought national and international recognition M•w.-..i 44..e.An aMeoa,. CoV•6c such as the Mies van der Rohe Prize for Latin American ;... vtro„Sc„ao"P Kota.,N; Architecture, recognitions by the American Institute of Architects, TENARQUITECTOS national and from various US states,Architectural Record,Architect Magazine,Architizer, Biennials in Mexico,Argentina and Ecuador; 1 the Royal Institute of British Architects,among others. I I 131s ' Iesa,geeb,❑..oVr•MKca Cry I i Sa. ..I..•Mem.Cry ..o.,ou.... { I 1 !! ••••••• t .-.• .` t s- • ••• COLLINS PARK i- • ••• CENTER _ ••••••• ..t• The Living Room • • / ( . {. • ti . . `; ....-,1 .-_,,,i-ei : , -I_ •••r'. • . '', .n. • --; • • Cultural Lounge open all day _. - s. � • Rotating art installations from partner nonprofits - • z A� featuring early-mid career marginalized artists ,. . r' { + b • Comfortable and Inviting Seating t'- .. v-,, - , • Complimentary Wi-Fi , - i • Coffee bar 1 1 __• _ • Bookshop curated by Books&Books - ` P+ I- - 4 ., cif 1 • t VIk •-' ,,LkneV -)..;11,.,;, 1� BuoKs 'P3001 - - F_01 . I.. 'Sic.,_ . -11 _ 'photos are representatfrf"""' I••.•• ••• COLLINS PARK - . • ••• CENTER • _- Ilan Park Cafe _ : , A 4 ek Collins atrill., , _a. A e _ J._. A dynamic and instantly welcoming neighborhood cafe r serving sustainably sourced coffee,world-class affordable :' s _ — �1 • I i x cuisine, and featuring a carefully curated roster of cutting ' 1 T edge live music. • • A nonprofit/private partnership between an experienced * restaurateur and Miami New Drama. - ''' 1 Z I r .1i r _ ;!i - 1 a F ' _^ ' AIM `6 a 7 'photos are representat1tram°"0°' 1 I _ eeeeee . :.:... COLLINSPARK =_ I, ... CENTER:. ... 'i: •••••• - .. - Community Education and Rehearsal Studio •Home for classes,workshops,educational programing,and camps — ' . •Home for Monday night Dance Seniors and other community activities _ •Open space that accommodates the footprint of Colony Theatre stage - - •Event space for MIND and others,combinable with the Studio Theater • - •Outward facing to the street so pedestrians can see how the work is developed -- k ` -Featuring sprung floors and mirrors for dance rehearsals =t �� j }f -: ll 4 -j` - £s;r £ '.'_-:.4F Eel£ 1":1]71111 I , ,�p��¢ a = Mii .1 r_____---LA _• ..--.• ;-0---, ,,' . ` I. 'photos are representative •••• _ - PARK `... COLLINS . — -- t ••• CENTER C' ¢ h � 1 �f •- r Hik { ,�., Costume Design Studio ,. €- A space that would serve as a tailor and fitting studio for Miami New $4— _ �_' ' •it e Drama productions, as well as hosting skills building education through ZQ_ craft and sewing. rrt , Creating Miami Beach jobs and Artist residencies in textile arts that can be featured in the lobby gallery. y= `.7- 1R Office Space • Serving as MIND headquarters _ `{ ' " r -, • Closed glass front offices - • Divided work stations 1- �' F - g . IC• Conference space �r t. ' • Providing a healthy,productive _ •= - : . F-1--21 work environment.. - ~3 / -- - 'photos are representattbe"°"'" 050000• • ••. COLLINS PARK 111 • •••• CENTER .S..... " MiND Studio Theater Programming to include • World class theater in an intimate setting • Spanish Language Programming • Theater for Young Audiences • Film Screenings • Special Events +i, ` ' • • Cultural Parter and Community Programming . • • -47 • • _ �� t' •s are representative 0000•• • . . COLLINS PARK • • 0 ' • ' CENTER • 0000•• Featured Cultural Partners at CPCC JN--- GUITARS DANN 0 W! 1, ' J • —;' J Our GusD • o I A p � AAAMI CLASSICAL MUSIC FESTNAL dim your.ad. 333333 L c BOOKS &BOOKS Cultural Partners presented by Miami New Drama at the Colony Theatre Alma ArtlBasel Wain ru.1%,e, A� CINEMA Dance �� cast�ili) On CbiS in Theater Miami beach G4FESTIVAL ITALY rine •a•q ami I c (,_�SSICaL' FG- �:• IVLVA <<t s l 11 \;I I,\I BALLFT BALLET or_ 1 _%II. [I ± . Rmer rteerJrh•d•w^fury Yb ___ ` TUllial nivatusolia$40004_. 1.1.401,SLAMDANCE UglMO t YEW'ki+IL'OYx3J: ' _�—'�.-. 7..:,dq/C4...:,./3f..,iat I{E ALES .00 IOW a tea •000 Oil 0 . . 0 • • • COLLINS PARK • • . • • • CENTER • •••••• SUPPORTED BY i A ....••••. TH E MIAMI .1110o.•.- I 1! I CITY BALLET New World Symphony BASS America's Orchestral Academy ' I BETS . . . .s.-- BEACH . , ._ Y 1 m 30..,1 -. 3.,,0:. • • 13tflal C01 I i ns CHAMBER OF COMMERCE SOBESAH- On NE*,-4BORHOOD • CULTURE,.AN_DGQMMERCE 14 F it !..;,'%,..k,.--.A5.. ..;- e Ai i i;ihi j a;�y .0,0001i�"ple rnivally i =.rit1 J J pm. econofni itfij t'of$11 M .1T . "t t :114 1j-ti ' t ':iTy 1 :- ' 4 1 1A1141 4611_ '1 ' r ,. . rAti -_ :,,J7L7t-,,tym , ., j . . COLLINS PARK - -�:. J, � . ti I, ••• • •• CENTER - I ,;`, , IIIIIIIIAPIIIrf . Transforming and serving the Collins Park neighborhood through dynamic theater, the celebration of culinary, visual and literary arts, and engaging community spaces. TERM SHEET—MIAMI NEW DRAMA LEASE TENANT: MIAMI NEW DRAMA INC. ("Tenant"or"MIND") LANDLORD: CITY OF MIAMI BEACH, FLORIDA("Landlord"or"City") LEASE: Proposed Lease Agreement by and between Tenant and City(the"Lease")with respect to the Premises(defined below) and generally consisting of the ground floor of Collins Park Garage,340 23rd St. Miami Beach LEASE TERMS 1.Facility: Ground floor of Collins Park Garage, approximately 16,000 sq. ft.interior space and additional exterior terrace areas,including a to be constructed 200 seat black box theater, cultural lobby/lounge/gallery, general use areas, rehearsal space, costume studio, office space for Tenant, café and general purpose studio (such space, together with the Buildout Improvements, as hereafter defined, the "Facility" or "Premises"). 2.Term: Initial Term of five (5) years (the "Initial Term"),with three (3) renewal options for a period of five(5)years,as provided below: (a) Two (2) renewal options for a period of five (5) years each subject to Tenant being in good standing(as a not-for-profit corporation and in compliance with applicable provisions of the City Code) and not otherwise in default of the Lease, including with respect to achieving Benchmark Performance Standards(addressed below);and (b) Following the initial two (2) renewal options, the City may renew the Term for a final renewal period of five (5) years upon mutual agreement of the parties. Because of the long programming lead time,for the initial two (2)renewal terms only(depending on 2.b above),the Lease will provide for the exercise of the option to extend for the applicable Renewal Term during the ninety (90) day period commencing one (1) year before the expiration of the Initial Term or Renewal Term (as applicable and then in effect). Each renewal term shall be on same terms and conditions of Initial Term. In the event Tenant fails to meet the Benchmark Performance Standards for the Lease Year immediately preceding a Renewal Term (subject to the occurrence of any Force Majeure Events), City may elect to not to accept the renewal option with respect to such Renewal Term at its sole 1 Page 1053 of 1884 and absolute discretion, provided that City must communicate its election not to accept such renewal to Tenant within sixty (60)days after Tenant exercises its renewal option with respect to the applicable Renewal Term. 3.Benchmark Performance Standards: During the first twelve (12) months following the Commencement Date (as set forth below)(such period being "Lease Year 1",with each successive twelve (12) month period thereafter being a "Lease Year"),Tenant shall cause the Facility to host at least: (1) 125 cultural or community activations per year;(2)25,000 patrons per year(inclusive of virtual patrons for hybrid events TBD); (3) 150 students per year; (4)75 seniors per year; (5) 50 Pro bono nonprofit/community rental hours per year; and (6) 500 discounted tickets provided per year. These benchmarks shall increase during the Initial Term as follows: (i) Lease Year 2: 150 events, 30,000 patrons, 175 students, 80 seniors, 50 pro bono nonprofit/community rental hours; (ii) Lease Year 3: 175 events 35,000 people, 200 students, 85 seniors, 55 pro bono nonprofit/community rental hours; (iii) Lease Year 4: 200 events 40,000 people, 225 students, 90 seniors,55 pro bono nonprofit/community rental hours;and(iv) Lease Year 5 (and thereafter including the Renewal Terms):220 events 45,000 people, 250 students, 95 seniors, 60 pro bono nonprofit/community benefit rental hours. Prior to any renewal term, as provided in Section 2 above, the Benchmark Performance standards may be adjusted based on the mutual agreement of the parties. In addition to Landlord's rights with respect to the renewal terms, Tenant's failure to achieve the Benchmark Performance Standards for two consecutive years shall be an event of default. 4.Commencement Date: The Lease will commence upon the earlier of Tenant's beneficial occupancy of the Premises or the Certificate of Occupancy for the Buildout Improvements. 5.Rent: Rent shall be $1 per year. For avoidance of any doubt, except as expressly provided in Section 6 below, Tenant shall not pay any additional rent under the Lease, with Tenant's obligations with respect to operating expenses being limited to those operating expenses being solely applicable to the Facility itself and Tenant shall expressly not pay any additional common area maintenance expenses with respect any other portion of the building (Collins Park Garage) within which the Facility is located. 2 Page 1054 of 1884 6.Operating Expenses/Grants: Except as provided below,Tenant shall be solely responsible for the operation and programming expenses of the Facility, including, without limitation, utilities, maintenance expenses, and applicable taxes(sales taxes,use/excise taxes,personal and ad valorem applicable to the Premises and Tenant's business therein) with no City funding obligation whatsoever with respect to such costs. As a condition of the Lease, MIND agrees to make reasonable efforts to apply for the Florida Division of Cultural Affairs Cultural Facilities Grant. Except as set forth herein,the City will have no other funding or other payment obligations with respect to the Facility or its Operating Expenses; provided, however, that City acknowledges and agrees that given the application cycle for such grants,MIND may not be able to apply for such grant prior to the execution of the Lease and in such event MIND shall apply for such grants in the next applicable application cycle. Notwithstanding the foregoing, Tenant, as a local cultural organization, may apply for Cultural Arts Council grants,and may pursue other grant opportunities offered by the City for programming, provided,however,that in recognition of City's significant contributions to Tenant by making the Premises available to Tenant rent-free and providing significant funding for the Buildout Improvements, Tenant shall not apply for any City grants related to the Buildout Improvements and Tenant shall not apply for City grants to improve, maintain or operate the Facility. 7. Maintenance: Tenant shall be responsible for day to day cleaning, maintenance, and repairs of the Premises. City shall be responsible for the major building systems(HVAC, electric,fire, water, water intrusion, etc.) and the building structure, including walls, windows, and exterior. Tenant shall be responsible to maintain,in a clean and orderly manner, the exterior frontage of the Premises, i.e. the sidewalk and stairs walk-up, in a manner consistent with similarly situated commercially establishments. For avoidance of any doubt,City shall,at its sole cost and expense(and without any pass through or charge to Tenant), be responsible for any and all (including day to day) maintenance, cleaning, and repairs with respect to any and all portions of the Collins Park Garage other than the Facility. 8.Cultural Center Buildout: The City shall be responsible for the funding for the construction services, permitting, selection of the contractor, and the construction for the buildout of the Premises and procurement 3 Page 1055 of 1884 and/or installation of all applicable theatrical equipment to be utilized by Tenant in connection with Tenant's use of the Facility (collectively, the "Buildout Improvements" or "Project"). The City's total available funding and budget for construction of the Project shall not exceed Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000.00) ("Landlord Contribution"). The City shall utilize a CM at Risk with Guaranteed Maximum Price ("GMP") delivery method for the construction of the Project. The Tenant shall be responsible for the selection and funding of the Project's design and design professionals(i.e.Architect),and will cause the Architect to deliver to the City the design layout of the Premises for the City's reasonable approval and comment (in City's proprietary capacity). IN NO EVENT SHALL THE CITY BE RESPONSIBLE TO FUND ANY PORTION OF THE DESIGN SERVICES AS SET FORTH HEREIN. Upon such approval, Tenant will cause the Architect to engage with all required consultants and prepare the Project plans and specifications.The design for the Project shall contain the minimum design elements set forth in Exhibit"A" (to be provided at a later date) hereto ("Mandatory Design Elements"),as provided by the City. The City and/or the City's Contractor will have the right to review and reasonably approve and provide comment as the plans and specifications are prepared at the 30%,60%,90%and final completion stages, again in its proprietary capacity. Tenant's contract with the Architect shall be subject to the City's reasonable approval and shall contain required contract language,attached as Exhibit"B" (to be provided at a later date).The parties agree that Buildout Improvements will be developed with a design-to-budget approach based upon a budget equal to the sum of the Landlord Contribution and Tenant's Contribution. Tenant will be provided the opportunity to participate in the budget process and may retain, at its expense, a consultant to monitor the construction of the Building Improvements and such consultant will be invited to attend construction meetings between the City and the Project professionals, contractor, engineer and architect.The City shall maintain ownership of all plans,specifications,permits,or other approvals,and any other work product developed to date in connection with the Project (the "Work Product"), along with a copy of all such Work Product, in an electronic or other format as mutually agreed upon by the Parties. The City will not charge the Project funding for administering the planning, permitting, and construction of 4 Page 1056 of 1884 the Project,except for fees and costs it normally charges to third parties in its regulatory capacity. The Guaranteed Maximum Price Agreement and the schedule of values attached thereto or contained therein(collectively,the "GMP Agreement") shall: (i) contain a contingency line item equal to ten percent(10%)of the overall project costs,and (ii) not exceed the amount of the Landlord Contribution. In no event shall the use of the contingency cause for the GMP to be exceeded, and the City's Contractor shall be solely responsible for all costs that exceed the GMP, without any reimbursement from the City. Prior to the commencement of the Buildout Improvements,City shall cause the City's Contractor to buy-out, at a minimum, (i) each line item of the schedule of values which exceeds $200,000.00 (and to the extent not exceeding $200,000.00, each major trade within the schedule of values) and (ii) eighty percent (80%) of the overall project costs (schedule of values), with the cost of such bought-out line items being consistent with the approved project budget (which shall not exceed the amount of the Landlord Contribution). In the event Tenant requests any change to the Buildout Improvements,Tenant shall submit such request to the City for the City's review and approval in its sole and absolute discretion; provided, however,with respect to any such change requiring a change order to the GMP Agreement,the City agrees not to unreasonably withhold, delay or condition its consent provided that either(i) after giving effect to such change order (and all prior change orders) at least twenty percent (20%) of the original contingency line item remains unallocated, or(ii) if the applicable change order (together with all prior change orders) would cause the unallocated contingency line item to fall below twenty percent(20%)of the original contingency line item, then Tenant shall have either (a) agreed to decrease the FF&E line item by the amount by which the unallocated contingency line item falls below twenty percent (20%), which decrease shall be reflected in the same requested change order, or (b) funded in cash the amount by which the unallocated contingency line item falls below twenty percent(20%). The above provisions are being inserted in order to ensure that City's contribution to the Project does not exceed the amount of the Landlord Contribution(i.e.,$4,750,000.00). 5 Page 1057 of 1884 9.Tenant Contribution to Project: As set forth in Section 8,Tenant shall be solely responsible for retaining and funding all design professionals, including the Architect, as may be required for the Project, which Tenant expects to cost Two Hundred Fifty Thousand Dollars ($250,000.00), which Tenant shall raise through grants and/or donations (such amount being the "Tenant's Contribution"). The Tenant's Contribution shall be used to fund the payment of all design services and soft costs (architectural and/or engineering fees)which may be incurred in connection with the Project and funds permitting to the acquisition of equipment for the theatrical performance space. The City may terminate the Agreement for convenience in the event Tenant fails to demonstrate it has secured funding for the design services/architect and fails to enter into a contract with an Architect within 365 days following the City Commission's approval of the Lease. 10. Use: Tenant shall use the Facility solely and exclusively as a theater for its not-for-profit cultural presentations, production of live theatrical performances and uses ancillary thereto,including its administrative and business functions and rehearsal, costume, and set design facilities for performances, and as further provided herein. The public space of the Facility shall be used primarily as a venue for cultural entertainment, education, exhibitions, lectures, and uses ancillary thereto. Subject to the reasonable approval of the City, and subject to the Prohibited Uses in Section 13 and Section 11 below, the Tenant may activate portions of the Facility through contractual arrangements with outside vendors for retail, or other commercial uses that are ancillary and complementary to the cultural component of the Facility. 11.Café Sublease/Concession: With respect to any sublease or concession agreement(or other similar agreement)for the operation of the restaurant or café at the Facility (the "Café"),Tenant shall charge the Café operator market rental rates and other terms and conditions comparable to the rental rates and terms and conditions offered to other similar food service establishments located in the vicinity of the Facility(as adjusted to account for market conditions which may vary for facilities located on a main street located within the City of Miami Beach (e.g., Collins Avenue). The Café operator and the economic terms of the agreement with the Café operator shall be subject to approval by the City Manager(or designee), shall have a term that does not exceed Initial Term (provided, however, that such agreement may provide for renewal or 6 Page 1058 of 1884 extension terms which shall become effective upon any Renewal Term under the Lease), and shall be automatically assignable to the City in the event of termination of Lease. Subject to City Manager's reasonable approval, Tenant may offer one concession or other for profit activation by a third party at below market rates to an approved vendor to be identified in the Lease (i.e. Books and Books) and shall not exceed 250 sq. ft. of the Premises. All other concessions or similar for-profit activations by third parties at the Facility offered at below market rates, shall be limited to a term of under 30 days (and may be extended upon written approval from the City Manager to 90 days), shall be ancillary and complementary to the cultural activations and/or programming within the Facility,and shall be subject to the City Manager's(or designees) reasonable approval. In the event that ad valorem taxes are assessed by the Miami- Dade County Tax Appraiser on the Facility, by reason of this Lease or by reason of any uses and/or activities of MIND or its sub-lessees, upon or in connection with the Facility, MIND agrees to pay,before delinquency,all such ad valorem taxes and assessments (provided, however, that the foregoing shall not preclude MIND from passing such costs along to the applicable sub-tenants operating within the Facility); however, MIND remains responsible notwithstanding. MIND shall conditionally assign all sub-leases, sub tenants, Cafe operator and MIND's concessionaires("Sub-lease")to the City,such that in the event of a termination of the Lease, the City may, upon written notice, assume the Sub-lease, and for the Sub-lessor to continue to perform all of its obligations to the benefit of the City. MIND shall also require language in each of its Sub-leases that the sub-lessor consents to the foregoing assignment. 12. Programming: N/A. 13.Prohibited Uses: No stand-alone bars (provide that the Café operator may provide a theater concession stand-alone bar and/or any temporary stand-alone bar operated in connection with any applicable permitted activation of the Facility, provided the stand-alone bar shall only serve alcohol 1.5 hours before theatrical performances, during intermission of theatrical performances,and one hour after theatrical performances,and the bar shall only be geared towards guests, participants, patrons and performers of the theatrical performances); 7 Page 1059 of 1884 Pawnshops and Secondhand dealers of precious metals/precious metals dealers; Accessory outdoor bar counters except in compliance with local law; Tobacco/vape dealers; Check cashing stores; Medical cannabis dispensaries (medical marijuana dispensaries); Convenience store; Grocery stores; Occult science establishments; Pharmacy stores; Souvenir and t-shirt shop; and Tattoo studios. 14. Key Person Clause: In recognition of the success of Tenant's programming,and Mr. Michel Hausmann and Mr. Nicholas Richberg's (each, a "Key Individual") instrumental efforts with regard thereto,the City's selection of the Tenant,and the Key Individual's participation as part of the Tenant's organization, is an integral and primary consideration for City's decision to approve this Lease. Accordingly, each Key Individual shall each be actively involved in the operation,management,and artistic direction of the Tenant and shall devote a substantial majority of their business time in such efforts. In the event that (i) one of the Key Individuals are no longer a director of, or employed by, the Tenant; or (ii) one or more of the Key Individuals are no longer devoting the necessary time, attention, and resources described above, Tenant shall notify City of such event (a "Key Individual Event"), and if no replacement Key Individual has been identified by the Tenant and reasonably approved by the City Manager within one hundred and eighty(180)days of such Key Individual Event,City shall have the right to terminate the agreement for convenience. 15.Miami Beach Headquarters: Throughout the term of the Lease, MIND must keep its main administrative offices and principal performance venue within the City of Miami Beach, with reasonable flexibility for special events or tour performances outside of the City. 16. Force Majeure: The Lease shall contain a mutual Force Majeure provision to toll obligations of the parties in the event of an act of god, i.e. hurricane, pandemic,etc. ("Force Majeure Event"). In addition, if City performs the Buildout Improvements, any City obligation to complete work shall be subject to extension for unavoidable delays and Force Majeure Events. The period for tolling of obligations under the Lease shall include the time associated with the Force Majeure Event itself, and the period of time following the Force Majeure Event that may be required to restore the Facility and/or remediate any delay, damage, loss, failure, or inability to perform as a consequence of the Force Majeure Event. 8 Page 1060 of 1884 17.Community Benefit proffers: In addition, and notwithstanding any participation in the City's Community Benefit Fund program, City shall have the right to utilize the Facility,excluding the restaurant/cafe, up to four(4) times per Lease Year, subject to availability and with reasonable notice to the Tenant, for such purposes including, but not limited to, recreational programs sponsored by the City, public meetings, training classes, City sponsored special events, receptions, and other public purposes as deemed necessary by the City,without the payment of any rental or use fee, except that direct out-of-pocket expenses incurred in connection with such uses (including reasonable expenses incurred by MIND in order to open and make the Premises available in connection with a City use thereof)shall be paid by the City.Additional community benefits to be developed with the Administration. 18. Days and Hours of Operation: Subject to the occurrence of Force Majeure Events and closures for reasonable periods for repairs, maintenance, and alterations, during the initial two (2) years of the Initial Term, Tenant shall open and operate the Facility at a minimum four (4)days a week and Tenant shall cause the Café to open at least six (6) days per week and generally during hours consistent with other similar Café operations within the vicinity of the Facility. Thereafter, Tenant shall open and operate the Facility (excluding the Café) at a minimum of six (6) days a week and Tenant shall cause the Café to open six(6) days per week and generally during hours consistent with other similar café operations within the vicinity of the Facility. Notwithstanding the forgoing, the day of the closure for the Café and the remainder of the Facility areas open to the public shall not fall on the same day,and accordingly,either the publicly accessible Facility areas or Café shall be open 7 days a week. 19. Maximum Permitted Closing Time: All events and all uses shall conclude prior to 2:00 a.m. unless otherwise approved by the City Manager,in writing; provided, however, that MIND's employees and/or contractors may be permitted to remain at the Facility beyond 2:00 a.m. in the event that same is necessary for purposes of loading in or dismantling a production, cleaning the Facility after a performance, etc., so long as MIND's activities at the Facility during this time do not disrupt or negatively impact the surrounding neighborhood.In the event of such disruption,the 9 Page 1061 of 1884 City Manager or his/her designee shall have the right to strictly enforce the hours of operation. 20.Sponsorship/Naming Rights: During the Term, Tenant shall have the right to erect interior signage in recognition of individual(s)or corporate sponsors or donors, including,without limitation banners. Any naming for exterior signage (including, without limitation, any sponsorship/donor names) shall be subject to approval as required by the City's Naming Ordinance,as codified in Chapter 82,Article VI,Sections 82-501 through 82-505 of the City Code, as amended from time to time. In no event shall any naming rights be conferred on any corporate sponsor or donor for any period of time that exceeds the term of this Lease (including Renewal Terms). All signage and advertising, whether or not related to approved naming, shall comply with signage standards established by the City Code and comply with all applicable building codes, and any other municipal, County, State,and Federal laws,including the design review process for any sign and/or graphic image. In no event may any approved interior or exterior signage include the names of any company selling the following types of products ("Prohibited Names"): [guns,tobacco, etc.]. Any naming recognition shall be subject to reconsideration in the event of any criminal conviction or similar misconduct on the part of the corporate sponsor or donor. If a sign or advertisement is deemed offensive or inappropriate (as determined by City in its reasonable discretion), the City may, in its proprietary capacity, require removal of the advertisement or sign. 21.Audit and Financial Records: In addition to the Inspector General Audit rights, the Tenant shall be required to maintain financial records and records of services and programs it provides at the Facility; said records shall be subject to audit by the City. 22. Reporting to City: Notwithstanding the Commencement Date, no less than annually,within 15 days after filing with the Internal Revenue Service,Tenant shall provide City with its 990 tax form.Tenant shall also provide City with quarterly program reports,detailing Benchmark Performance Standards (including total number of participants, total number of Events, and total public benefits provided,such as free or discounted tickets,and the like.) 23. License/Compliance with Laws: Tenant shall be solely responsible for obtaining, or shall cause its food service vendors(including,without limitation,the Café operator) to obtain, the requisite alcoholic beverage license that may be required if alcoholic beverages shall be served in connection with the operation of the Facility. Tenant or the 10 Page 1062 of 1884 Café operator shall obtain all applicable occupational licenses, and all permits required for sale and service of food. Tenant shall comply with all applicable laws related to sale and service of food and alcohol. 24.Insurance: Tenant shall,at its sole expense, maintain any insurance which may be reasonably required by the City including, without limitation, General Liability, Property All Risk Coverage, Workers' Compensation required by Florida law; Automobile Liability insurance; and Liquor Liability Coverage. 25.City Approval of Assignments, Subleases,and Other Contracts: No assignment, transfer, sublease, concession, or license agreement for the entire Premises(or for the operation of the Café, as set forth herein) shall be valid without the City's written consent(at City's sole and absolute discretion),which consent,if given,may require the contracting party to pay fair market rent/value for the use of the Premises. Notwithstanding the foregoing, Tenant will be permitted to enter into (i) agreements consistent with the permitted uses and (ii) subleases of less than the entire Premises, subject to approval by the City Manager, which approval shall not be unreasonably withheld or delayed. 26.Termination for Cause: City may terminate the agreement for cause upon an uncured Event of Default by Tenant. Events of Default shall include: failure to observe or perform any of the covenants or provisions of the Agreement, which continues for thirty (30) days following written notice(with the standard extension for additional time as may be required if diligently pursuing cure etc.); Insolvency of Tenant; any wrongful assignment, sublease or transfer by Tenant not authorized by the Agreement; failing to achieve Benchmark Standards for two consecutive years; and failure of Tenant to maintain its exempt organization status as a not-for-profit corporation that exists for charitable or educational purposes. • 27.Termination for Convenience: City may terminate the Agreement for convenience: (1) the City does not obtain all regulatory approvals required for the Buildout Improvements; (2)Tenant does not secure funding and/or enter into contract with Architect within 365 days after Lease approval by City Commission; and (3) Tenant fails to replace Key Individual. In addition to the foregoing,either party may terminate this Agreement for Convenience in the event the City Commission, at its sole and absolute discretion, does not 11 Page 1063 of 1884 budget and appropriate sufficient funds for the Buildout Improvements on or before October 1,2024. 28.City Representation on MIND Board: City Manager or designee shall serve as a voting member of the Miami New Drama, Inc.'s board of directors, with City Manager having the option to designate one (1) additional representative to serve as a non-voting member of Tenant's board of directors. The City board appointees shall have the same rights afforded to all Tenant board members. 29. Promotion of City of Miami Beach's Lead Sponsorship Support of MIND: In recognition of the City of Miami Beach's foundational support of MIND,the Tenant shall promote the City of Miami Beach's cultural partnership with Tenant on Tenant's website, digital and social media, at performances, and in all collateral material where corporate sponsors or donors are referenced. In addition, Tenant shall, in all appropriate materials, platforms, and correspondence with the media, market itself as being "headquartered" or "based" in the City of Miami Beach. 30.Extension of Colony Theatre As part of Tenant's commitment to be"headquartered"in the City of Miami Beach for the entire term of this Lease(including renewal periods thereof), and in furtherance of the Parties' mutual desire to ensure the Tenant's continued activation and operation of the Colony Theatre, Tenant agrees to an extension of the term of its Management Agreement for the Colony Theatre to align with the term (including renewal periods) of this Lease. This Lease and the Management Agreement will have a cross-default provision so that an uncured material event of default of the Management Agreement, as defined in the Management and Lease Agreements, shall constitute an event of default under this Lease(and vice versa). 12 Page 1064 of 1884 • • ; .•.: . . . . , Miami Beach Branding .. .., _,,,,,,.... • }.„, , ___, .-0...': „„ ,, MIAMI NEW MIAMI BEACH - • �� DRAMA _ c MIAMA F `t Muni exec c BEAC4i f 4 __ •- is iii^=_- f -,,if-,,:.: ., 4� ,� (e..s _ iAMI v. . 4:.,. ,,s ,,A //t /NEW ......:,.. . -mow al